AMERICAN TOWER SYSTEMS CORP, S-1/A, 1998-06-01

AMERICAN TOWER SYSTEMS CORP
S-1/A, 1998-06-01
COMMUNICATIONS SERVICES, NEC

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 1, 1998

REGISTRATION NO. 333-52481
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- -------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

----------------

AMENDMENT NO. 1

TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

----------------

AMERICAN TOWER SYSTEMS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE 4899 65-0598206
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NO.)
INCORPORATION OR CLASSIFICATION CODE
ORGANIZATION) NUMBER)

116 HUNTINGTON AVENUE, BOSTON, MASSACHUSETTS 02116
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

----------------

STEVEN B. DODGE
AMERICAN TOWER SYSTEMS CORPORATION
116 HUNTINGTON AVENUE
BOSTON, MASSACHUSETTS 02116
(617) 375-7500
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

----------------

COPIES TO:
NORMAN A. BIKALES, ESQ. JOHN T. BOSTELMAN, ESQ.
SULLIVAN & WORCESTER LLP SULLIVAN & CROMWELL
ONE POST OFFICE SQUARE 125 BROAD STREET
BOSTON, MASSACHUSETTS 02109 NEW YORK, NEW YORK 10004

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CALCULATION OF REGISTRATION FEE

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<TABLE>
<S> <C> <C> <C> <C>
PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT MAXIMUM AGGREGATE
SECURITIES TO BE REG- TO BE OFFERING PRICE OFFERING AMOUNT OF
ISTERED REGISTERED(1) PER SECURITY(2) PRICE(1)(2)(3) REGISTRATION FEE
- -----------------------------------------------------------------------------------------------
Class A Common Stock,
$.01 par value........ 23,619,871(3) (3) $497,567,031 $146,784(4)
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</TABLE>
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(1) Includes 2,361,987 shares which the Underwriters have the option to
purchase to cover over-allotments of shares. See "Underwriting".

(2) Based on the average of the bid and ask prices in the "when-issued"
trading market on May 5, 1998 and May 28, 1998, in accordance with Rule
457(c) under the Securities Act.

(3) The shares registered herein include (a) 22,918,499 shares for which a
registration fee has previously been paid with the original filing of this
registration statement on May 12, 1998 based upon $21.125, which equals
the average of the bid and ask prices in the "when-issued" trading market
on May 5, 1998; and (b) 701,372 additional shares for which a registration
fee is paid herewith based upon $19.125, which is the average of the bid
and ask prices in the "when-issued" trading market on May 28, 1998.

(4) The fee of $142,826 was previously paid with the initial filing of this
Registration Statement with the Commission on May 12, 1998. A fee of
$3,958 is hereby paid in connection with this filing.

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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS
REGISTRATION STATEMENT WILL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES
AND EXCHANGE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY DETERMINE.

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

SUBJECT TO COMPLETION, DATED MAY 29, 1998

23,619,871 SHARES

LOGO

CLASS A COMMON STOCK
($.01 PAR VALUE)

-------

Of the shares offered hereby (this "Offering") 20,000,000 shares are being sold
by American Tower Corporation (formerly American Tower Systems Corporation,
"ATS") and 3,619,871 shares are being sold by the Selling Stockholders named
herein. ATS will not receive any of the proceeds of shares sold by the
Selling Stockholders. With certain exceptions, the Class A Common Stock and
the Class B Common Stock vote as a single class with the Class A Common
Stock and the Class B Common Stock entitled to one vote and ten votes per
share, respectively. Assuming consummation of this Offering, Steven B.
Dodge and Thomas H. Stoner together with their affiliates will have
approximately 44.7% of the combined voting power with respect to
substantially all matters submitted for the vote of all stockholders.

The information presented in this Prospectus gives effect to the completion of
certain material

pending transactions. See "Presentation of Information."

The Class A Common Stock is traded on a "when-issued" basis in the over-the-
counter market and has been approved for listing on the New York Stock
Exchange (the "NYSE") upon consummation of the CBS Merger. The last quoted
sales price per share on May 28, 1998 in the over-the-counter market was $20
1/2.

FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION
WITH AN INVESTMENT IN THE CLASS A COMMON STOCK, SEE "RISK FACTORS" ON PAGE
11.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS
PRICE TO DISCOUNTS AND PROCEEDS TO TO SELLING
PUBLIC COMMISSIONS COMPANY(1) STOCKHOLDERS
-------- ------------- ----------- ------------
<S> <C> <C> <C> <C>
Per Share.................................. $ $ $ $
Total (2).................................. $ $ $ $
</TABLE>

(1) Before deduction of expenses, all of which are payable by ATS, estimated at
$1,500,000.

(2) ATS has granted the Underwriters an option, exercisable for 30 days from
the date of this Prospectus, to purchase a maximum of 2,361,987 additional
shares to cover over-allotments of shares. If the option is exercised in
full, the total Price to Public will be $ , Underwriting Discounts and
Commissions will be $ and Proceeds to Company will be $ .

The shares are offered by the several Underwriters when, as and if delivered
to and accepted by the Underwriters and subject to their right to reject orders
in whole or in part. It is expected that the shares will be ready for delivery
on or about June , 1998, against payment in immediately available funds.

CREDIT SUISSE FIRST BOSTON
BT ALEX. BROWN
LEHMAN BROTHERS
MORGAN STANLEY DEAN WITTER
BEAR, STEARNS & CO. INC.
MERRILL LYNCH & CO.
SALOMON SMITH BARNEY

Prospectus dated June , 1998.
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[MAP]

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE SECURITIES
OFFERED HEREBY, INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS, SYNDICATE
SHORT COVERING TRANSACTIONS, PENALTY BIDS AND PASSIVE MARKET MAKING. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING".

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ATS's principal executive offices are located at 116 Huntington Avenue,
Boston, Massachusetts 02116, (617) 375-7500.

ATS changed its name to American Tower Corporation upon consummation of the
ATC Merger. See "Prospectus Summary--History of ATS".

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PRESENTATION OF INFORMATION

The information with respect to ATS gives effect to all acquisitions which
have been consummated since January 1, 1997 or which are subject to a binding
agreement (the "Recent Transactions"), except as otherwise explained. The
Unaudited Pro Forma Condensed Consolidated Financial Statements of American
Tower Systems (and certain other pro forma financial information) give effect
only to the more significant acquisitions. The completion of the CBS Merger,
the ATC Merger, the issuance of Interim Preferred Stock and the New Credit
Facilities, all as described in the Prospectus Summary and elsewhere, are
expected to occur in June 1998. All percentages of total voting power set
forth in this Prospectus are based on shares outstanding as of June . , 1998,
do not give effect to subsequent conversions, if any, of Class B Common Stock
or Class C Common Stock into Class A Common Stock, or conversions of Class B
Common Stock or Class C Common Stock of ARS into Class A Common Stock of ARS,
and assume that the Underwriters' over-allotment option is not exercised.

As used in this Prospectus, (a) the "Company", "American Tower Systems" and
"ATS" mean American Tower Systems Corporation (name changed to American Tower
Corporation pursuant to the ATC Merger), (b) "ATC" means American Tower
Corporation, prior to the ATC Merger, (c) "ATC Merger" means the merger of ATC
into ATS, (d) "American Radio" or "ARS" means American Radio Systems
Corporation, (e) "CBS" means CBS Corporation, (f) "CBS Merger" means the
merger of a subsidiary of CBS into ARS, (g) "ATSI" means American Tower
Systems (Delaware), Inc., a wholly-owned subsidiary of ATS and one of the two
operating subsidiaries of ATS, (h) "ATSLP" means American Tower Systems, L.P.,
an indirect wholly-owned subsidiary of ATS, which conducts all of the business
of ATS other than that conducted by ATSI, (i) "Operating Subsidiary" means
each of ATSI and ATSLP, and (j) "ATS Pro Forma Transactions" include, among
other things, seven major acquisitions but do not include all Recent
Transactions (see Note (2) under "Selected Financial Data"). References to ATS
include ATS and its consolidated subsidiaries, including ATSI and ATSLP,
unless the context otherwise requires.

FORWARD-LOOKING STATEMENTS

Some of the statements contained in this Prospectus under "Prospectus
Summary", "Risk Factors", "Management's Discussion and Analysis of Financial
Condition and Results of Operations", "Industry Overview" and "Business" are
forward-looking. They include statements concerning (a) growth strategy, (b)
liquidity and capital expenditures, (c) construction and acquisition
activities, (d) debt levels and ability to obtain financing and service debt,
(e) competitive conditions in the communications site as well as in the
wireless carrier industries, (f) regulatory matters affecting the
communications site industry, (g) projected growth of the wireless
communications industry, and (h) general economic conditions. Actual results
may differ materially from those suggested by the forward-looking statements
for various reasons, including those discussed under "Risk Factors".

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PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this Prospectus.
It is not complete and may not contain all of the information to be considered
before investing in the Class A Common Stock. Investors should read the entire
Prospectus carefully, including the "Risk Factors" section and the pro forma
financial information and the financial statements and the notes to those
statements. The information with respect to ATS gives effect to all
acquisitions which have been consummated since January 1, 1997 or which are
subject to a binding agreement, except as otherwise explained.

AMERICAN TOWER SYSTEMS

GENERAL

ATS is a leading independent owner and operator of communications towers in
the United States. As a consequence of its current industry position and
experience, ATS believes it is favorably positioned to capitalize on the growth
opportunities inherent in a rapidly expanding and highly fragmented
communications site industry. Since its organization in 1995, ATS has grown,
predominantly through acquisitions, to a company operating more than 1,800
towers in 44 states and the District of Columbia. Although it intends to pursue
strategic acquisitions, ATS plans to focus on tower construction and to build
or commence construction of between approximately 400 and 500 towers in 1998,
at an estimated aggregate cost of between approximately $80.0 and $100.0
million. For the year ended December 31, 1997, giving effect to the ATS Pro
Forma Transactions, ATS had net revenues and EBITDA of $94.9 million and $40.2
million, respectively. For the three months ended March 31, 1998, giving effect
to the ATS Pro Forma Transactions, ATS had net revenues and EBITDA of $25.1
million and $9.7 million, respectively.

ATS's primary business is the leasing of antennae sites on multi-tenant
towers for a diverse range of wireless communications industries, including
personal communications services ("PCS"), cellular, enhanced specialized mobile
radio ("ESMR"), specialized mobile radio ("SMR"), paging, and fixed microwave,
as well as radio and television broadcasters. ATS also offers its customers a
broad range of network development services, including network design, site
acquisition, zoning and other regulatory approvals, tower construction and
antennae installation. ATS intends to expand these services and to capitalize
on its relationships with its wireless customers through construction for them
of major tower networks that ATS will own and operate. ATS is also engaged in
the video, voice and data transmission business, which it currently conducts in
the New York City to Washington, D.C. corridor and in Texas.

ATS is geographically diversified with significant networks of communications
towers throughout the United States. Its largest networks are in California,
Florida and Texas, and it owns and operates or is constructing tower networks
in numerous cities, including Albuquerque, Atlanta, Austin, Baltimore, Boston,
Dallas, Houston, Jacksonville, Kansas City, Los Angeles, Miami-Ft. Lauderdale,
Minneapolis, Nashville, New York, Philadelphia, Sacramento, San Antonio, San
Diego, San Francisco, Tucson, Washington, D.C. and West Palm Beach.

ATS has a diversified base of approximately 2,500 customers, no one of which
accounted for more than 10% of its 1997 pro forma net revenues from site
leasing activities and the five largest of which accounted for less than 30% of
such net revenues. ATS's wide range of customers include most of the major
wireless service providers, including Airtouch, Alltell, AT&T Wireless
Services, Bell Atlantic Mobile, BellSouth, GTE Mobilnet, Houston Cellular,
Metrocall, MobileComm, Nextel, Omnipoint, PacBell, PageNet, PowerTel, PrimeCo
PCS, SkyTel, Southwestern Bell, Sprint PCS, and Western Wireless. In addition,
most of the major companies in the radio and television broadcasting industry
are ATS's customers, including ABC, CBS, Chancellor Media, Clear Channel, CNN,
Fox, Jacor and NBC.

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principal elements of this strategy are: (i) to maximize utilization of
antennae sites through targeted sales and marketing techniques; (ii) to expand
its tower construction activities, principally through build to suit projects;
and (iii) to pursue strategic acquisitions, designed principally to facilitate
entry into new geographic markets and to complement the construction program.

ATS's growth strategy is designed to capitalize on the rapid growth taking
place in the wireless communications industry. ATS believes that the increase
in demand for wireless communications is attributable to a number of factors,
including the increasing mobility of the U.S. population and the growing
awareness of the benefits of mobile communications, technological advances in
communications equipment, decreasing costs of wireless services, favorable
changes in telecommunications regulations, and business and consumer
preferences for higher quality voice and data transmission. This demand has
prompted the issuance of new wireless communication licenses, including those
for certain new higher frequency technologies (such as PCS and ESMR) that have
a reduced cell range and thus require a more dense network of towers. Because
of the anticipated increase in the demand for these new technologies, as well
as the expansion of other wireless services (including cellular and paging),
ATS expects that construction of new wireless networks will increase
substantially over the next several years.

In addition to such favorable growth and outsourcing trends, management
believes that ATS will benefit from several communications site industry
characteristics, including: (i) a recurring and growing revenue stream; (ii)
low tenant "churn"; (iii) a diversified customer base, principally of national
companies; (iv) favorable tower cash flow margins; (v) low on-going maintenance
capital requirements; (vi) local government and environmental initiatives which
promote increased antennae co-location; and (vii) consolidation opportunities
in a highly fragmented industry.

GROWTH STRATEGY

ATS's objective is to enhance its position as a leading U.S. provider of
communications site and network development services to the wireless
communications and broadcasting industries. ATS's growth strategy consists of
the following principal elements:

Internal Growth through Sales, Service and Capacity
Utilization. Management believes that a substantial opportunity for
profitable growth exists by maximizing the utilization of existing and
future towers. Because the costs of operating a site are largely fixed,
increasing tower utilization significantly improves tower operating
margins. ATS intends to use targeted sales and marketing techniques to
increase utilization on both existing and newly constructed towers and to
maximize investment returns on acquired towers with underutilized capacity.

Growth by Construction. Management intends to focus on new tower
development for the foreseeable future. ATS believes that attractive
investment returns can be achieved by constructing new tower networks in
and around markets in which it already has a presence, along major
highways, and in targeted new markets, particularly markets that have not
been significantly built out by carriers or other communications site
companies. By working with one or more "anchor" tenants, ATS will seek to
develop an overall master plan for a particular network. This strategy
serves to minimize, to some extent, the risks associated with the

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investment. Strategic acquisitions will also be pursued to fill out or, in
certain cases, initiate a tower network. Management also intends to pursue
new tower construction to service the demand for digital television and for
tower space for radio antennae displaced by digital television
requirements. Over time, management believes that more than half of its
towers will result from new construction, with the vast majority of these
designed to serve the wireless communications industry.

The ability to obtain, and commit to, large new construction projects
will require significant financial resources. Management believes that its
cost of capital, relative to the cost of capital of its competitors, will
be an important factor in determining the success of its growth by
construction strategy. Based on its previous capital market transactions,
management believes that it has a good reputation in the financial
community that will help it raise capital on the favorable terms necessary
to finance its growth. However, there can be no assurance that funds will
be available to ATS on such terms.

During 1997, ATS (including ATC and other acquired companies) built or
had under construction approximately 240 towers, including those
constructed for and owned by third parties. During 1998, ATS (including ATC
and other acquired companies) plans to build or commence construction of
between approximately 400 and 500 towers (most of which are on a build to
suit basis) at an estimated aggregate cost of between approximately $80.0
and $100.0 million. In addition, ATS is seeking other major build to suit
projects, although there can be no assurance that any definitive agreements
will result.

Growth by Acquisition. ATS has achieved a leading industry position
primarily through acquisitions, and intends to continue to pursue strategic
acquisitions of communications sites in new and existing markets, including
possibly non-U.S. markets. ATS also intends to pursue, on a selective
basis, the acquisition of site acquisition companies and providers of
video, voice and data transmission services. ATS may also pursue
acquisitions related to the communications site industry, including
companies engaged in the tower fabrication business.

HISTORY OF ATS

In early 1995, Steven B. Dodge, Chairman of the Board, President and Chief
Executive Officer of American Radio, and other members of management,
recognized the opportunity in the communications site industry as a consequence
of ARS's ownership and operation of broadcast towers. ATS was formed in July
1995 to capitalize on this opportunity. ATS's 1996 acquisition program was
modest, entailing the acquisition of approximately 15 communications sites and
businesses managing approximately 250 sites for others, for an aggregate
purchase price of approximately $21.0 million. Since January 1, 1997, ATS has
acquired more than 550 communications sites, exclusive of the ATC Merger, and
its site acquisition and voice, video and data transmission businesses.

RECENT AND PENDING TRANSACTIONS

ATC Merger. On June . , 1998, ATS consummated a merger agreement with ATC,
pursuant to which ATC merged into ATS (the "ATC Merger"). ATC was a leading
independent owner and operator of wireless communications towers with
approximately 900 towers (including then pending acquisitions of approximately
60 towers) in 32 states, of which approximately 125 towers were managed for a
third party owner. ATC owned and operated towers in 45 of the top 100
metropolitan statistical areas in the United States and had clusters of towers
in cities such as Albuquerque, Atlanta, Baltimore, Dallas, Houston,
Jacksonville, Kansas City, Minneapolis, Nashville and San Antonio. ATC's
customers included Bell South Mobility, CSX Transportation, GTE Mobilnet,
Houston Cellular, Nextel, PageMart, PageNet, SBC Communications, Shell
Offshore, Sprint PCS and various federal and local government agencies. For the
year ended December 31, 1997, ATC had net revenues and EBITDA of $20.0 million
and $12.7 million, respectively. For the three months ended March 31, 1998, ATC
had net revenues and EBITDA of $6.3 million and $4.1 million, respectively. ATS
issued approximately 30.1 million shares of Class A Common Stock (including
shares issuable upon exercise of options) pursuant to the ATC Merger. Such 30.1
million shares represent approximately 35% of ATS's pro forma

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number of shares of outstanding Common Stock (giving effect to the exercise of
all options then outstanding, but not to this Offering or the issuance of
shares pursuant to the acquisitions described in the following paragraph). See
"Business--Recent Transactions--ATC Merger".

Pending Acquisitions. ATS is a party to several other pending transactions,
the principal ones involving the acquisition of: (i) the 58 towers of an
existing joint venture in which ATS owns a 70% interest ("ATS/PCS"), for a
number of shares of Class A Common Stock which is being negotiated, and (ii) a
company which is in the process of constructing approximately 40 towers in the
Tampa, Florida area for a purchase price (payable, at the option of the seller,
to the extent of not less than 50.1% in shares of Class A Common Stock valued
at the time of closing and the balance in cash) equal to the excess of (a) ten
(10) times the annualized operating cash flow of those towers at the time of
closing (estimated for the spring of 1999) over (b) the seller's aggregate
indebtedness for money borrowed at such time. See "Business--Recent
Transactions--Pending Acquisitions".

CBS Merger. In December 1997, American Radio entered into an amended and
restated merger agreement (the "CBS Merger Agreement") pursuant to which a
subsidiary of CBS was merged into American Radio on June . , 1998. As a
consequence of the consummation of the CBS Merger, all of the shares of ATS
owned by ARS were or will be distributed to ARS common stockholders and holders
of options to acquire ARS Common Stock or upon conversion of shares of ARS
Convertible Exchangeable Preferred Stock (the "ARS Convertible Preferred
Stock"). As a consequence of the CBS Merger, ATS ceased to be a subsidiary of,
or otherwise affiliated with, American Radio and is currently operating as an
independent publicly traded company. Pursuant to the provisions of the CBS
Merger Agreement, ATS entered into an agreement (the "ARS-ATS Separation
Agreement") with CBS and ARS providing for, among other things, the allocation
of certain tax liabilities to ATS, certain closing date adjustments relating to
ARS, the lease to ARS by ATS of space on certain towers previously owned by ARS
and transferred to ATS, the orderly separation of ARS and ATS, and certain
indemnification obligations (including with respect to securities laws matters)
of ATS.

ATS's principal obligation is to reimburse CBS on a "make-whole" (after tax)
basis for the tax liabilities in excess of $20.0 million to be incurred by ARS
attributable to the distribution of the Common Stock to the ARS security
holders and certain related transactions. In light of the significant increase
in the trading levels of the Class A Common Stock, ATS and CBS agreed that ARS
will treat the distribution on its tax return on a more conservative basis than
originally contemplated in order to avoid the possibility of significant
interest and penalties for which ATS would be responsible. Assuming the "fair
market value" of ARS's stock interest in ATS was equal to $20 11/16 per share,
the last reported sale price of such stock in the "when-issued" market on May
22, 1998, the total estimated tax reimbursement ATS would be required to make
would be between approximately $270.0 and $300.0 million, depending on
applicable state tax rates. Such estimate gives effect to deductions of
approximately $88.0 million, based on such closing price, available to ARS as a
consequence of stock option cancellations contemplated by the CBS Merger. The
tax reimbursement would change by between approximately $20.5 and $22.5
million, again depending on applicable state tax rates, for each $1.00 change
in the "fair market value" of the Common Stock under the tax reporting position
to be followed. The estimates described above are based on a number of
assumptions and interpretations of various applicable income tax rules and are
subject to change.

ARS has agreed that it will pursue, for the benefit and at the cost of ATS, a
refund claim, attributable to the foregoing "make-whole" provision, estimated
at approximately $74.0 million, based on the assumed "fair market value" set
forth above. Any such refund claim will in fact be based on the actual amount
of tax paid. In light of existing tax law, there can, of course, be no
assurance that any such refund claim will be successful. For information with
respect to possible challenges by the Internal Revenue Service (or other taxing
authorities) to ATS's positions with respect to such tax liability, see "Risk
Factors--Relationship between ATS and ARS--Certain Contingent Liabilities" and
"Relationship between ATS and ARS".

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ARS and CBS have agreed that in computing the amount of taxable gain that is
recognized by ARS in connection with the distribution of the Common Stock, ARS
shall, subject to certain limitations, if so requested by ATS, report the
amount so realized based on the "fair market value" of such stock as determined
based on an appraisal prepared by a mutually agreed upon appraiser. Any such
appraisal is not, of course, binding on the Internal Revenue Service or other
taxing authorities.

In connection with an inter-corporate taxable transfer of assets entered into
in January 1998 by ATS in contemplation of the separation of ATS and ARS, a
portion of the tax with respect to which ATS is obligated to indemnify CBS was
incurred. Such transfer resulted in an increase in the tax bases of ATS's
assets of approximately $330.0 million. ATS will have potential depreciation
and amortization deductions over the next 15 years of $22.0 million per year
and recorded a deferred tax asset of approximately $125.0 million to reflect
this.

The ARS-ATS Separation Agreement also provides for closing date balance sheet
adjustments based upon the working capital (current assets less defined
liabilities) and specified debt levels of ARS. ATS will benefit from or bear
the cost of such adjustments. ATS's preliminary estimate of such adjustments is
that it will not be required to make a payment of more than $40.0 million and
that, in addition, it will be required to reimburse CBS for the tax
consequences of any such payment which would result in additional liability of
ATS of approximately $26.0 million (assuming a $40.0 million adjustment
payment) under the tax reporting method to be followed and as to which a refund
claim will be filed. Since the amounts of working capital and debt are
dependent upon the uncertainty, among other things, of recent operating results
and cash capital expenditures, as well as CBS Merger expenses and the
interpretation and intent of certain provisions of the CBS Merger Agreement as
to which certain issues between ATS and CBS exist, ATS is unable to state
definitively what payments, if any, will be owed by ATS to CBS. See "Risk
Factors--Relationship Between ATS and ARS--Certain Contingent Liabilities" and
"Relationship Between ATS and ARS--Closing Date Adjustments".

ATS has entered into a commitment letter (the "Interim Financing Agreement")
with Credit Suisse First Boston Corporation, one of the Representatives of the
several Underwriters, with respect to a preferred stock financing (the "Interim
Financing") which provides for the issuance and sale by ATS of up to $400.0
million of preferred stock (the "Interim Preferred Stock") to finance ATS's
obligation to CBS with respect to tax reimbursement. Pursuant to the Interim
Financing Agreement, in June 1998, ATS issued $310.0 million of Interim
Preferred Stock to fund such tax reimbursement obligation and pay the fees and
other expenses of the issue and sale of such stock. ATS intends to redeem the
Interim Preferred Stock out of the proceeds of this Offering.

New Credit Facilities. On June . 1998, ATS entered into new loan
arrangements (the "New Credit Facilities") with its senior lenders, pursuant to
which the maximum borrowing of the Operating Subsidiaries was increased from
$400.0 million to $900.0 million, subject to compliance with certain financial
ratios, and ATS (the parent holding company) borrowed an additional $150.0
million.

MANAGEMENT

The senior management of ATS consists of the following senior executive
officers: Steven B. Dodge, Chairman of the Board of Directors, President and
Chief Executive Officer; Douglas Wiest, Chief Operating Officer; Joseph L.
Winn, Treasurer and Chief Financial Officer; James S. Eisenstein, Executive
Vice President--Corporate Development; J. Michael Gearon, Jr., Executive Vice
President of ATS, president of Gearon Communications, the site acquisition and
development division of ATS, and a director; and Alan L. Box, Executive Vice
President responsible for the video, voice and data transmission business of
ATS and a director. ATS is managed through a central headquarters in Boston,
but relies on four regional offices (located in Atlanta, Boston, Houston and
the San Francisco Bay area) for marketing, operations and site management.

5
<PAGE>

THE OFFERING

Class A Common Stock
offered................ 20,000,000 shares by ATS(1)

3,619,871 shares by the Selling Stockholders

23,619,871 Total shares of Class A Common Stock

Common Stock to be
outstanding after this
Offering (2)........... 85,137,652 shares of Class A Common Stock
9,140,363 shares of Class B Common Stock
3,295,518 shares of Class C Common Stock

97,573,533 Total shares of Common Stock

Voting rights...........
With certain exceptions, the Class A Common Stock and
the Class B Common Stock vote as a single class with
each share of Class A Common Stock entitled to one
vote and each share of Class B Common Stock entitled
to ten votes. The holders of the Class A Common
Stock, voting as a separate class, are entitled to
elect two independent directors and Delaware
corporate law and ATS's Restated Certificate of
Incorporation (the "ATS Restated Certificate")
require certain class votes. Assuming consummation of
this Offering, approximately 44.7% of the total
voting power will be owned by Steven B. Dodge and
Thomas H. Stoner together with their affiliates. See
"Principal and Selling Stockholders". The Class C
Common Stock is nonvoting, except as otherwise
required by law. The term "Common Stock" means the
Class A Common Stock, the Class B Common Stock and
the Class C Common Stock.

Other rights............ Each class of Common Stock has the same rights to
dividends and upon liquidation. The Class B Common
Stock cannot be sold or transferred, except to
certain permitted transferees, and automatically
converts into Class A Common Stock upon any other
sale or transfer. The Class B Common Stock and the
Class C Common Stock are convertible into Class A
Common Stock on a share-for-share basis, subject, in
the case of the one holder of Class C Common Stock,
to certain conditions. See "Description of Capital
Stock".

Trading Market..........
The Class A Common Stock is traded on a "when-issued"
basis in the over-the-counter market and has been
approved for listing on the New York Stock Exchange
(the "NYSE") upon consummation of the CBS Merger. The
last quoted sales price per share on May 28, 1998 in
- -------- the over-the-counter market was $20 1/2.

(1) Does not include 2,361,987 shares of Class A Common Stock issuable by ATS
pursuant to the over-allotment option granted to the Underwriters.

(2) Does not include (a) shares of Class A Common Stock issuable upon
conversion of Class B Common Stock or Class C Common Stock, (b) 2,361,987
shares of Class A Common Stock issuable by ATS pursuant to the over-
allotment option granted to the Underwriters, (c) an aggregate of
4,103,014 shares of Common Stock to be issued pursuant to the exercise of
options issued in exchange for options previously outstanding as follows:
(i) options to purchase 682,000 shares of Common Stock of ATSI, which were
exchanged for options to purchase approximately 931,330 shares of Common
Stock at a weighted average exercise price of $4.17, or (ii) options to
purchase 599,400 shares of ARS Common Stock, which were exchanged (based
on the relative market prices of the ARS Common Stock and the Class A
Common Stock of $64.00 per share and $20.00 per share, respectively) for
options to purchase 1,918,080 shares of Common Stock at a weighted average
exercise price of $6.03, and (iii) options to purchase 6,500 shares of ATC
Common Stock, which were exchanged for options to purchase 1,253,604
shares of Class A Common Stock at a weighted average exercise price of
$2.28, or (d) shares issuable pursuant to certain pending acquisitions.

6
<PAGE>

Use of Proceeds.........
ATS estimates that it will receive net proceeds from
this Offering of approximately $381.5 million
(assuming a public offering price of $20.00 per
share). It expects to use such net proceeds to redeem
the Interim Preferred Stock at a price of 101% of the
liquidation preference and to reduce bank borrowings;
the proceeds of the Interim Preferred Stock were used
to satisfy ATS's obligation to reimburse CBS for the
tax liabilities required to be borne by ATS pursuant
to the ARS-ATS Separation Agreement and to pay the
fees and expenses associated with the Interim
Financing. ATS will not receive any proceeds from the
sale of Class A Common Stock by the Selling
Stockholders.

Risk Factors............
For a discussion of certain risks investors should
consider before investing in the Class A Common
Stock, see "Risk Factors".

Dividend Policy.........
ATS does not intend to pay cash dividends on the
Common Stock. Moreover, the New Credit Facilities
restrict the payment of cash dividends by ATS.

7
<PAGE>

SELECTED FINANCIAL DATA

The following Selected Financial Data of American Tower Systems has been
derived from the consolidated financial statements of American Tower Systems
included elsewhere in this Prospectus. The Selected Financial Data should be
read in conjunction with American Tower Systems's audited and unaudited interim
financial statements and the notes thereto and with "Management's Discussion
and Analysis of Financial Condition and Results of Operations". The Selected
Financial Data as of March 31, 1997 and 1998 are unaudited but, in the opinion
of management, contain all adjustments necessary for a fair presentation in
conformity with generally accepted accounting principles. The pro forma
financial data with respect to the three months ended March 31, 1998 and year
ended December 31, 1997 included below reflects certain adjustments, as
explained elsewhere in this Prospectus, and therefore any comparison of such
pro forma financial data with the Selected Financial Data appearing below for
periods prior to 1997 is inappropriate. Such pro forma financial data gives
effect to this Offering, the ATS Pro Forma Transactions and the CBS Merger, as
described in the Notes to Unaudited Pro Forma Condensed Consolidated Statements
of Operations of American Tower Systems. The ATS Pro Forma Transactions do not
include all Recent Transactions or pending construction. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations".

The historical financial data presented below reflects periods during which
ATS did not operate as an independent company. Therefore, such data may not
reflect the results of operations or the financial condition which would have
resulted if ATS had operated as a separate, independent company during such
periods, and is not necessarily indicative of ATS's future results of
operations or financial condition.

"Tower Cash Flow" means operating income (loss) before depreciation and
amortization and corporate general and administrative expenses. "EBITDA" means
operating income (loss) before depreciation and amortization. "After-tax cash
flow" means income (loss) before extraordinary items, plus depreciation and
amortization, less preferred stock dividends. All of such terms include
deferred revenue attributable to certain leases. See Consolidated Statements of
Cash Flow of American Tower Systems and Notes to Consolidated Financial
Statements of American Tower Systems. ATS does not consider Tower Cash Flow,
EBITDA and after-tax cash flow as, nor should they be considered in isolation
from, or as a substitute for, alternative measures of operating results or cash
flow from operating activities (as determined in accordance with generally
accepted accounting principles ("GAAP")) or as a measure of ATS's profitability
or liquidity. Although these measures of performance are not calculated in
accordance with GAAP, ATS has included them because many of them are widely
used in the communications site industry as a measure of a company's operating
performance. More specifically, ATS believes they can assist in comparing
company performance on a consistent basis without regard to depreciation and
amortization, which can vary significantly depending on accounting methods
(particularly where acquisitions are involved) or non-operating factors such as
historical cost bases. Tower Cash Flow also excludes the effect of corporate
general and administrative expenses, which generally do not relate directly to
communications site performance.

8
<PAGE>

SELECTED FINANCIAL DATA(1)

<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS THREE MONTHS ENDED
DECEMBER 31, 1997 ENDED MARCH 31, MARCH 31, 1998
------------------------ ----------------- ------------------
HISTORICAL
-----------------
JULY 17, 1995 YEAR ENDED
THROUGH DECEMBER 31,
DECEMBER 31, 1995 1996 HISTORICAL PRO FORMA(2) 1997 1998 PRO FORMA(2)
----------------- ------------ ---------- ------------ ------- -------- ------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPER-
ATIONS DATA:
Net operating rev-
enues............ $ 163 $2,897 $ 17,508 $ 94,922 $1,366 $17,925 $25,089
Operating ex-
penses:
Operating ex-
penses excluding
depreciation,
amortization and
corporate gen-
eral and
administrative.. 60 1,362 8,713 50,182 538 11,495 13,887
Depreciation and
amortization.... 57 990 6,326 54,952 504 5,802 14,569
Corporate general
and
administrative.. 230 830 1,536 4,536 280 541 1,541
----- ------ --------- -------- ------- -------- -------
Total operating
expenses........ 347 3,182 16,575 109,670 1,322 17,838 29,997
----- ------ --------- -------- ------- -------- -------
Operating income
(loss)........... (184) (285) 933 (14,748) 44 87 (4,908)
Interest expense,
net.............. -- (36) 2,789 10,418 71 1,565 3,464
Other expense (in-
come)............ -- -- 15 15
Minority interest
in net earnings
of subsidiar-
ies(3)........... -- 185 178 178 80 79 79
----- ------ --------- -------- ------- -------- -------
Loss before income
taxes............ (184) (434) (2,049) (25,359) (107) (1,557) (8,451)
Benefit (provi-
sion) for income
taxes............ 74 (46) 473 4,796 49 30 2,041
----- ------ --------- -------- ------- -------- -------
Loss before ex-
traordinary
item............. $(110) $ (480) $ (1,576) $(20,563) $ (58) $ (1,527) $(6,410)
===== ====== ========= ======== ======= ======== =======
Basic and diluted
pro forma loss
per common share
before extraordi-
nary item(4)..... $ (0.03) $ (0.21) -- $ (0.03) $ (0.07)
========= ======== ======= ======== =======
Basic and diluted
pro forma common
shares outstand-
ing.............. 48,692 97,574 -- 48,967 97,574
========= ======== ======= ======== =======
OTHER OPERATING
DATA:
Tower cash flow... $ 103 $1,535 $ 8,795 $ 44,740 $ 828 $ 6,430 $11,202
EBITDA............ (127) 705 7,259 40,204 548 5,889 9,661
EBITDA margin..... (N/A) 24.3% 41.5% 42.4% 40.1% 32.9% 38.5%
After-tax cash
flow............. (53) 510 4,750 34,389 446 4,275 8,159
Cash provided by
(used for)
operating activi-
ties............. (51) 2,229 9,913 -- 216 (1,737) --
Cash used for in-
vesting
activities....... -- -- (216,783) -- (3,346) (91,835) --
Cash provided by
financing
activities....... 63 132 209,092 -- 2,410 95,777 --
</TABLE>

<TABLE>
<CAPTION>
1995 1996 1997 1998(5)
---- ---- ---- -------
<S> <C> <C> <C> <C>
TOWER DATA(5):
Towers operated at beginning of period................... -- 3 269 671
Towers acquired(6)...................................... 3 265 321 1,043
Towers constructed...................................... -- 1 81 90
--- --- --- -----
Towers operated at end of period......................... 3 269 671 1,804
=== === === =====
Aggregate towers constructed(7).......................... 3 31 240 90
=== === === =====
</TABLE>

9
<PAGE>

<TABLE>
<CAPTION>
MARCH 31, 1998
------------------------
HISTORICAL PRO FORMA(2)
---------- ------------
(IN THOUSANDS)
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents............................ $ 6,800 $ 7,911
Working capital deficiency, excluding current portion
of long-term debt................................... (124,945) (735)
Property and equipment, net.......................... 156,827 282,615
Total assets......................................... 533,014 1,040,731
Long-term debt, including current portion............ 157,150 197,139
Total stockholders' equity........................... 233,317 708,317
</TABLE>
- --------
(1) ATSI was organized on July 17, 1995 and American Radio contributed all of
the issued and outstanding capital stock of ATSI to ATS on September 24,
1996. Year-to-year comparisons are significantly affected by the timing of
acquisitions of communications sites and related businesses and
construction of towers, both of which have been numerous during the period.
The principal acquisitions made in 1996 and 1997 are described in
"Business--Recent Transactions" and the Consolidated Financial Statements
of American Tower Systems.

(2) The unaudited pro forma Statement of Operations Data and Other Operating
Data for the three months ended March 31, 1998 and the year ended December
31, 1997 give effect to the ATS Pro Forma Transactions, the CBS Merger, and
this Offering, as if each of the foregoing had occurred on January 1, 1998
and January 1, 1997, respectively. The unaudited pro forma Balance Sheet
Data as of March 31, 1998 gives effect to the ATC Merger (the only ATS Pro
Forma Transactions not then consummated), the CBS Merger and this Offering,
as if each of the foregoing had occurred on March 31, 1998. The term "ATS
Pro Forma Transactions" means the Meridian Transaction, the Diablo
Transaction, the MicroNet Transaction, the Tucson Transaction, the Gearon
Transaction, the OPM Transaction, the ATC Merger, consummation of
transactions contemplated by the Stock Purchase Agreement, and the transfer
of towers (the "Transfer of Towers") from ARS to ATS. It does not include
all of the Recent Transactions or pending construction. None of the
foregoing data gives effect to the Interim Financing because the Interim
Preferred Stock is to be redeemed out of the proceeds of this Offering. See
"Business--Recent Transactions" and "Unaudited Pro Forma Condensed
Consolidated Financial Statements of ATS".
(3) Represents the elimination of the 49.9% member's earnings of ATS Needham,
LLC, in which ATSLP holds a 50.1% interest and the elimination of the 30%
member's loss of ATS/PCS (formerly Communications Systems Development LLC),
in which ATSLP holds a 70% interest.
(4) Pro forma basic and diluted loss per share has been computed using (a) in
the case of historical information, the number of shares outstanding
following the CBS Merger and (b) in the case of pro forma information, the
number of shares expected to be outstanding following the CBS Merger and
the transactions discussed in Note 2 above and the Notes to the Unaudited
Pro Forma Condensed Consolidated Statement of Operations.
(5) Includes information with respect to ATS only and is for the year shown,
except 1998, which is as of May 1, and assumes consummation of all Recent
Transactions then pending (including those of ATC), but does not include
towers then under construction by ATS. See Note (7) below.
(6) Includes towers managed for others (including rooftops), the management
contracts for which were acquired, as follows; 1996--251 (217); 1997--86
(35); and 1998--155 (27).

(7) Includes towers constructed in each period by ATS and all acquired (or to
be acquired) companies, including, in certain cases, towers constructed for
and owned by third parties.

10
<PAGE>

RISK FACTORS

Investors should consider carefully the following factors, in addition to
the other information contained in this Prospectus, before purchasing the
securities offered hereby.

SUBSTANTIAL CAPITAL REQUIREMENTS AND LEVERAGE

ATS's acquisition and construction activities have created and will continue
to create substantial ongoing capital requirements. During 1997, ATS made
capital investments aggregating approximately $184.1 million for acquisitions
and approximately $20.6 million for capital expenditures and construction,
including site upgrades. ATS currently has under construction or plans to
construct during 1998 between approximately 400 and 500 towers at an estimated
aggregate cost of between approximately $80.0 and $100.0 million. In addition,
ATS is actively seeking other major build to suit projects. Historically, ATS
has financed its capital expenditures through a combination of bank
borrowings, equity investments by ARS, and cash flow from operations. As of
March 31, 1998, on a pro forma basis, giving effect to all then or currently
pending Recent Transactions, the CBS Merger and the Interim Financing (but not
planned construction and the use of proceeds of this Offering), ATS would have
had aggregate borrowings of approximately $409.4 million (exclusive of certain
non-recourse debt), Interim Preferred Stock outstanding with an aggregate
liquidation preference of $310.0 million, and may have substantial obligations
under the ARS-ATS Separation Agreement with respect to closing date balance
sheet adjustments as described elsewhere in this Prospectus. See "--
Relationship between ATS and ARS--Certain Contingent Liabilities" below.

ATS expects that it will continue to be required to borrow funds to finance
construction and, to a lesser extent, acquisitions and that it will operate
with substantial leverage. If ATS's revenues and cash flow do not meet current
expectations, or if its borrowing base is reduced as a result of operating
performance, ATS may have limited ability to access necessary capital. If such
cash flow is not sufficient to meet its debt service requirements, ATS could
be required to sell equity or debt securities, refinance its obligations or
dispose of certain of its operating assets in order to make scheduled
payments. There can be no assurance that ATS would be able to effect any such
transactions on favorable terms.

On June . 1998, ATS entered into the New Credit Facilities with its senior
lenders, pursuant to which the maximum borrowing of the Operating Subsidiaries
were increased from $400.0 million to $900.0 million, subject to compliance
with certain financial ratios, and ATS (the parent holding company) borrowed
an additional $150.0 million. The New Credit Facilities include certain
financial and operational covenants and other restrictions which must be
satisfied. Included among such provisions are limitations on additional
indebtedness, capital expenditures, uses of borrowed funds, permitted
investments, and cash distributions. Such agreements also require the
maintenance of certain financial ratios. The obligations of the borrowers
under the New Credit Facilities are collateralized, among other things, by a
first priority security interest in substantially all of the operating assets
and property of the consolidated group.

Management believes that, upon consummation of this Offering, ATS will have
available to it funds sufficient to finance current construction plans, to
consummate pending acquisitions, to redeem the Interim Preferred Stock and to
satisfy its obligation with respect to any closing date balance sheet
adjustments under the ARS-ATS Separation Agreement. Should additional
construction or acquisition opportunities become available, however, ATS might
require additional financing during 1998. Any such financing could take the
form of an increase in the maximum borrowing levels under the New Credit
Facilities (which would be dependent on the ability to meet certain leverage
ratios), the issuance of debt or senior equity securities (which could have
the effect of increasing consolidated leverage ratios) or Class A Common
Stock, convertible securities or warrants (which would have a dilutive effect
on the proportionate ownership of ATS of its then existing common
stockholders). There can be no assurance that any such debt or equity
financing would be available on favorable terms.

11
<PAGE>

DEPENDENCE ON DEMAND FOR WIRELESS COMMUNICATIONS AND IMPLEMENTATION OF DIGITAL
TELEVISION

The demand for rental space on ATS's towers is dependent on a number of
factors beyond ATS's control. Such factors include the demand for wireless
services by consumers, the financial condition and access to capital of
wireless service providers, wireless service providers' preference for owning
or leasing their communications sites, government licensing of broadcast
rights, changes in Federal Communications Commission ("FCC") regulations,
zoning and environmental regulations, and general economic conditions. A
slowdown in the growth of wireless communications in the United States would
depress network expansion activities and reduce the demand for ATS's antennae
sites. In addition, the demand for ATS's antennae sites could be adversely
affected by factors such as a downturn in a particular wireless segment, or of
the number of carriers, nationally or locally, in a particular segment. Such a
downturn could result from technological or other competition or other factors
beyond the control of ATS. In addition, wireless service providers often enter
into "roaming" and "resale" arrangements that permit providers to serve
customers in areas where they do not have facilities. Specifically, in most
cases, these arrangements are intended to permit a provider's customers to
obtain service in areas outside the provider's license area or, in the case of
resale arrangements, to permit a provider that has no licenses to enter the
wireless marketplace. Current FCC rules, which are subject to sunset
requirements that vary from service to service and market to market, also give
licensed wireless service providers the right to enter into roaming and resale
arrangements with other providers licensed to serve overlapping service areas.
Such roaming and resale arrangements could be viewed by some wireless service
providers as superior alternatives to constructing their own facilities or
leasing antennae space on communications sites owned by ATS. If such
arrangements were to become common, there could be a material adverse effect
on ATS's prospects, financial condition and results of operations. See
"Industry Overview".

The demand for rental space on ATS's towers is also dependent on the demand
for tower sites by television and radio broadcasters. Many of the same factors
described above are also applicable to television and radio broadcasters. ATS
could also be affected adversely should the development of digital television
be delayed or impaired, or if demand were to decrease because of industry
delays in implementing the changes.

CONSTRUCTION OF NEW TOWERS

The success of ATS's growth strategy is highly dependent on its ability to
complete new tower construction. Such construction can be prevented, delayed
and/or made more costly by factors beyond the control of ATS. Among such
factors are zoning and local permitting requirements, FCC and Federal Aviation
Administration ("FAA") regulations, environmental group opposition,
availability of erection equipment and skilled construction personnel, and
adverse weather conditions. In addition, as the pace of tower construction has
increased in recent years, manpower and equipment needed to erect towers have
been in increasing demand. Such factors could increase costs and delay time
schedules associated with new tower construction, either of which could have a
material adverse effect on ATS's prospects, financial condition and results of
operations. The anticipated increase in construction activity, both for ATS
and the communications site industry generally, is likely to exacerbate
significantly these factors. The construction of towers for the broadcasting
industry could be particularly affected by a potential shortage of
construction capability should a large number of towers be required to be
built in a relatively short period of time to accommodate the initiation of
digital television service. See "Business--Regulatory Matters".

In addition, the scope of ATS's 1998 and subsequent construction program is
substantially greater than the combined past construction programs of ATS and
the various companies that it has acquired or agreed to acquire, including
Gearon and ATC. While ATS's construction program will be conducted and managed
at a regional level, there can be no assurance that ATS has sufficient
personnel resources to ensure the timely and efficient implementation of its
construction program in a cost effective manner and the subsequent management
of the substantially increased number of towers.

ATS competes for new tower construction sites with wireless service
providers, site developers and other independent communications site operating
companies. ATS believes that competition for tower construction

<PAGE>

sites will increase and that additional competitors will enter the
communications site market, certain of which may have greater financial
resources than ATS.

In addition to competing for new tower construction sites, ATS faces strong
competition for build to suit opportunities, principally from other
independent communications site operators and site developers, certain of
which have more extensive experience and offer a broader range of services
(principally in constructing themselves rather than managing the construction
of others) than ATS can presently offer.

Build to suit activities involve certain additional risks. Although such
projects involve at least one "anchor" tenant, there can be no assurance that
a sufficient number of additional tenants will be secured for all or most of
the towers to be constructed pursuant to such projects (particularly the
larger ones that ATS is seeking) to ensure that such projects will be
profitable. Moreover, ATS may find that one of the reasons that carriers are
willing to permit ATS to build towers for them is that certain or many of such
towers may be on sites where it is either expensive or difficult to build or
that such sites are unlikely to attract a sufficient number of other tenants
to ensure profitability or adequate investment returns. In addition, as noted
above, ATS's experience to date has been limited to projects of considerably
smaller scope than the projects that it is negotiating and others on which it
will be bidding.

Accordingly, there can be no assurance that ATS's construction program,
including one or more of its build to suit projects, might not have a material
adverse effect on ATS's prospects, financial condition and results of
operations.

ACQUISITION STRATEGY

ATS has pursued, and intends to continue to pursue on a selective basis, its
acquisition strategy. The risks inherent in such a strategy include increasing
leverage and debt service requirements, combining disparate company cultures
and facilities, and operating towers in many geographically diverse markets.
Certain of these risks may be increased to the extent that ATS's acquisitions
(such as the ATC Merger) are larger and/or involve communications sites in
diverse geographic areas. In addition, management will be responsible for a
substantially larger pool of assets than it has previously managed in the
communications site industry. Accordingly, there can be no assurance that one
or more of ATS's past or future acquisitions may not have a material adverse
effect on its prospects, financial condition and results of operations.

ATS competes with certain wireless service providers, site developers and
other independent tower owners and operators, as well as financial
institutions, for acquisitions of towers and sites. Certain of those
competitors have greater financial and other resources than ATS. The success
of ATS's growth strategy continues to be dependent, although to a lesser
extent than in the past, on its ability to identify and complete acquisitions.
Increased competition, which ATS anticipates will occur, may result in fewer
opportunities as well as higher prices. No assurance can be given that ATS
will be able to identify, finance and complete acquisitions on acceptable
terms.

RELATIONSHIP BETWEEN ATS AND ARS--CERTAIN CONTINGENT LIABILITIES

The ARS-ATS Separation Agreement requires ATS to reimburse CBS on a "make-
whole" (after tax) basis for the tax liabilities to be incurred by ARS
attributable to the distribution of the Common Stock to the ARS security
holders and certain related transactions to the extent that the aggregate
amount of taxes required to be paid by ARS exceeds $20.0 million. The amount
of that tax liability is dependent on the "fair market value" of the Class A
Common Stock at the time of the consummation of the CBS Merger. In light of
the significant increase in the trading levels of the ATS Class A Common
Stock, ATS and CBS agreed that ARS will treat the distribution on its tax
return on a more conservative basis than originally contemplated in order to
avoid the

13
<PAGE>

possibility of significant interest and penalties for which ATS would be
responsible. Assuming the "fair market value" of ARS's stock interest in ATS
was equal to $20 11/16 per share, the last reported sale price of such stock
in the when-issued market on May 22, 1998, the total estimated tax
reimbursement ATS would be required to make would be between approximately
$270.0 and $300.0 million, depending on applicable state tax rates. Such
estimate gives effect to deductions of approximately $88.0 million, based on
such closing price, available to ARS as a consequence of stock option
cancellations contemplated by the CBS Merger. The tax reimbursement would
change by between approximately $20.5 and $22.5 million, again depending on
applicable state tax rates, for each $1.00 change in the "fair market value"
of the Common Stock under the tax reporting position to be followed. The
estimates described above are based on a number of assumptions and
interpretations of various applicable income tax rules and are subject to
change.

ARS has agreed that it will pursue, for the benefit and at the cost of ATS,
a refund claim, attributable to the "make-whole" provision, estimated at
approximately $74.0 million, based on the assumed "fair market value" set
forth above. Any such refund claim will, in fact, be based on the actual
amount of taxes paid. In light of existing tax law, there can, of course, be
no assurance that any such refund claim will be successful. ATS is also unable
to state whether challenges will be made by the Internal Revenue Service (or
other taxing authorities) to the "fair market value" as reported or other
positions taken by ARS (on behalf of and at the expense of ATS) on the tax
returns or, if made, whether a court would sustain them. See "Relationship
between ATS and ARS--Sharing of Tax and Other Consequences".

Prospective investors should be aware that the Internal Revenue Service (or
other taxing authorities) could challenge the factual or legal basis on which
the estimates set forth above are based. For example, the Internal Revenue
Service (or other taxing authorities) could assert that the fair market value
of the Common Stock distributed by ARS was greater than the trading price,
basing such challenge on an assertion that the trading levels of the Common
Stock following the consummation of the CBS Merger were higher, or that the
distribution represented a "control" block and therefore commanded a "premium"
or that the "enterprise" value of ATS exceeded the aggregate market value.

The ARS-ATS Separation Agreement also provides for closing date balance
sheet adjustments based upon the working capital (current assets less defined
liabilities) and specified debt levels of ARS. ATS will benefit from or bear
the cost of such adjustments. ATS's preliminary estimate of such adjustments
is that it will not be required to make a payment of more than $40.0 million
and that, in addition, it will be required to reimburse CBS for the tax
consequences of such payment which would result in additional liability of ATS
of approximately $26.0 million under the tax reporting method to be followed
and as to which a refund claim will be pursued. Since the amounts of working
capital and debt are dependent upon the uncertainty, among other things, of
recent operating results and cash capital expenditures as well as CBS Merger
expenses and the interpretation and intent of certain provisions of the CBS
Merger Agreement as to which certain issues between ATS and CBS exist, ATS is
unable to state definitively what payments, if any, will be owed by ATS. CBS
has raised certain issues regarding the intent and interpretation of the
working capital adjustment provisions, particularly as they affect the amount
of taxes that must be accrued thereon with respect to the distribution of
Common Stock to the ARS security holders and the treatment of the tax benefit
of the deduction attributable to the cancellation of ARS stock options. To the
extent CBS prevails on such issues, ATS would also be responsible for the tax
reimbursement attributable to any working capital or other adjustments. ATS is
unable to state, at this time, how the issues will be resolved. See
"Relationship between ATS and ARS--Closing Date Adjustments".

The ARS-ATS Separation Agreement also provides for the leasing by ATS to ARS
of space (at below market rentals negotiated with CBS in September 1997) on 16
towers previously owned by ARS and transferred or to be transferred by ARS to
ATS. See "Relationship between ATS and ARS--Lease Arrangements".

14
<PAGE>

DEPENDENCE ON KEY PERSONNEL

The implementation of ATS's growth strategy is dependent, to a significant
degree, on the efforts of ATS's Chief Executive Officer and its other
executive officers. ATS has not entered into employment agreements with any of
its executive officers, other than with J. Michael Gearon, Jr., the former
principal stockholder and chief executive officer of Gearon & Co., Inc., and
Douglas Wiest, the recently recruited Chief Operating Officer. Many of the
executive and other officers have been granted options to purchase shares of
Common Stock that are subject to vesting provisions generally over a five-year
period. However, there can be no assurance that ATS will be able to retain
such officers, the loss of whom could have a material adverse effect upon it,
or that it will be able to prevent them from competing in the event of their
departure. ATS does not maintain key man life insurance of any significance on
the lives of any of such officers.

ENVIRONMENTAL MATTERS

Under various federal, state and local environmental laws, an owner or
lessee of real estate may become liable for the costs of investigation,
removal or remediation of soil and groundwater contaminated by certain
hazardous substances or wastes. Certain of such laws impose cleanup
responsibility and liability without regard to whether the owner or operator
of the real estate knew of or was responsible for the contamination. Such
liability may continue whether or not operations at the property have been
discontinued or the property has been transferred. The owner or operator of
contaminated real estate also may be subject to common law claims by third
parties based on damages and costs resulting from off-site migration of the
contamination. ATS may be potentially liable for environmental costs such as
those discussed above.

CONTROL BY THE PRINCIPAL STOCKHOLDERS; RESTRICTIONS ON CHANGE OF CONTROL

On June . , 1998, giving pro forma effect to the consummation of this
Offering, Messrs. Dodge and Stoner, together with their affiliates (the
"Principal Stockholders"), owned approximately 44.7% of the combined voting
power of the Common Stock. See "Principal and Selling Stockholders".
Accordingly, the Principal Stockholders may, in effect, be able to control the
vote on all matters submitted to a vote of the holders of the Common Stock,
except with respect to (i) the election of two independent directors, and (ii)
those matters that the ATS Restated Certificate or applicable law requires a
66 2/3% vote or a class vote. Control by the Principal Stockholders may have
the effect of discouraging certain types of transactions involving an actual
or potential change of control of ATS. See "Description of Capital Stock--
Common Stock".

The New Credit Facilities provides that a "Change of Control" (as defined
therein) of ATS constitutes an "Event of Default". In addition, the
Communications Act of 1934, as amended (the "Communications Act"), and the
rules of the FCC require the prior consent of the FCC for any change of
control of ATS. Finally, certain provisions of the Delaware law may have the
effect of discouraging a third party from making an acquisition proposal for
ATS and may thereby inhibit a change of control. See "Description of Capital
Stock--Delaware Business Combination Provisions".

RISK ASSOCIATED WITH NEW TECHNOLOGIES

The emergence of new technologies could reduce the need for tower-based
transmission and reception and, thereby, have a negative impact on ATS's
operations. For example, the FCC has granted license applications for several
low-earth orbiting satellite systems that are intended to provide mobile voice
and/or data services. Although such systems are highly capital-intensive and
are not yet commercially tested, mobile satellite systems could compete with
land-based wireless communications systems, thereby reducing the demand for
the infrastructure services provided by ATS. Additionally, the growth in
delivery of video services by direct broadcast satellites and the development
and implementation of signal combining technologies (which permit one antenna
to service two different frequencies of transmission and, thereby, two
customers) and satellite-delivery systems may reduce the need for tower-based
broadcast transmission. The occurrence of any of these factors could have a
material adverse effect on ATS's prospects, financial condition and results of
operations.

15
<PAGE>

CERTAIN PERCEIVED HEALTH RISKS

ATS and the lessees of antennae sites on its towers are subject to
government regulations relating to radio frequency ("RF") emissions. In recent
years, there have been several substantial studies by the scientific community
investigating the potential connection between RF emissions and possible
negative health effects, including cancer. The results of these studies have,
to date, been inconclusive. ATS has not been subject to any claims relating to
RF emissions, although it is possible that such claims may arise in the
future. Since ATS does not maintain any significant insurance with respect to
such matters, such claims, if substantiated, could have a material adverse
effect on its prospects, financial condition and results of operations.

LACK OF DIVIDENDS; RESTRICTIONS ON PAYMENT OF DIVIDENDS AND REPURCHASE OF
COMMON STOCK; DILUTION

ATS intends to retain any available earnings for the growth of its business
and does not anticipate paying any cash dividends on the Common Stock in the
foreseeable future. In addition, the New Credit Facilities restrict the
payment of cash dividends or other distributions and the repurchase,
redemption or other acquisition of equity securities of ATS. See "Description
of Capital Stock--Common Stock--Dividend Restrictions". The public offering
price exceeds the net tangible book value per share. Investors who purchase
shares of Class A Common Stock in this Offering will sustain immediate and
substantial dilution (approximately $18.63 per share). See "Dilution".

POSSIBLE VOLATILITY OF STOCK PRICE

Investors may not be able to resell the shares of Class A Common Stock at or
above the public offering price. Factors such as market conditions in the
wireless communications industry may have a significant impact on the market
price of the Class A Common Stock. Further, the stock market has experienced
volatility that affects the market prices of companies in ways often unrelated
to the operating performance of such companies. These market fluctuations may
adversely affect the market price of the Class A Common Stock. There can be no
assurance as to the price at which the Class A Common Stock will trade or as
to the liquidity or volatility of any such trading market. Market prices might
also be affected by shares available for future sale held by certain
stockholders who hold freely saleable shares or who have registration rights.
See "Shares Eligible for Future Sale".

16
<PAGE>

USE OF PROCEEDS

The net proceeds to ATS from this Offering (after deduction of the
underwriting discount and estimated offering expenses) are estimated, based on
an assumed initial public offering price of $20.00 per share, to be
approximately $381.5 million ($426.4 million if the Underwriters' over-
allotment option is exercised in full). ATS expects to use such net proceeds
to redeem the Interim Preferred Stock at a price of 101% of its liquidation
preference and to reduce borrowings under the New Credit Facilities. Proceeds
of the Interim Preferred Stock were used to reimburse CBS with respect to the
taxes payable as a consequence of the separation of ARS and ATS pursuant to
the CBS Merger and to pay the fees and expenses associated with the Interim
Financing. The New Credit Facilities of the Operating Subsidiaries provide for
$900.0 million credit facilities consisting of (i) a $250.0 million multiple-
draw term loan, (ii) a $400.0 million reducing revolving credit facility, and
(iii) a $250.0 million 364-day revolving credit facility that converts to a
term loan facility thereafter. The ATS New Credit Facility is a $150.0 million
single-draw term loan that has been fully borrowed. Borrowings under the New
Credit Facilities may be used to finance the construction of towers, ATS's
remaining obligations with respect to acquisitions, and its obligations with
respect to any closing date balance sheet adjustments under the ARS-ATS
Separation Agreement. ATS may also utilize such borrowings to finance, among
other things, acquisitions of additional communications sites or other related
businesses. However, ATS has no binding commitments or agreements with respect
to any material acquisition, except as otherwise described in this Prospectus.

As of March 31, 1998, on a pro forma basis, assuming consummation of the ATS
Pro Forma Transactions and all other Recent Transactions, as well as the CBS
Merger and the Interim Financing, but not this Offering, ATS would have had
aggregate indebtedness under the New Credit Facilities of approximately $409.4
million and Interim Preferred Stock outstanding with an aggregate liquidation
preference of $310.0 million. After giving effect to this Offering and
assuming the use of the net proceeds described above, as of such date, there
would have been aggregate borrowings under the New Credit Facilities of
approximately $341.0 million. The Chase Manhattan Bank ("Chase") is a lender
under the New Credit Facilities for the Operating Subsidiaries and will
receive its proportionate share (5.2%) of any repayments of borrowings. Chase
is an affiliate of Chase Equity Associates. See "Management--Certain
Transactions", "Principal and Selling Stockholders", "Relationship between ATS
and ARS--Sharing of Tax and Other Consequences" and the Notes to Consolidated
Financial Statements of American Tower Systems.

ATS will not receive any proceeds from the sale of Class A Common Stock by
the Selling Stockholders.

MARKET PRICES AND DIVIDEND POLICY

On February 27, 1998, the Class A Common Stock commenced trading on a "when-
issued" basis on the inter-dealer bulletin board of the over-the-counter
market. During the period from February 27, 1998 through May 28, 1998, the
range of the high and low per share bid prices in such "when-issued" market
was $26 1/8 and $15 1/2. The Class A Common Stock commenced trading on NYSE on
June . , 1998 (the day following consummation of the CBS Merger). During the
period from June ., 1998 through June . , 1998, the range of the high and low
per share closing prices as reported on NYSE was $ . and $ . . On June .,
1998, the per share closing price as reported on NYSE was $ . .

ATS has not paid a dividend on any class of its capital stock and
anticipates that it will retain future earnings, if any, to fund the
development and growth of its business. It does not anticipate paying cash
dividends on shares of Common Stock in the foreseeable future. In addition,
each Operating Subsidiary is restricted under the New Credit Facilities from
paying dividends on the stock (distributions to its partners, in the case of
ATSLP) and repurchasing, redeeming or otherwise acquiring any shares of Common
Stock (or partnership interests). Since ATS has no significant assets other
than its ownership of each Operating Subsidiary, its ability to pay cash
dividends in the foreseeable future is restricted. The New Credit Facilities
also restrict the payment of cash dividends by ATS. See "Description of
Capital Stock--Dividend Restrictions" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources".

17
<PAGE>

CAPITALIZATION

Prior to the consummation of the CBS Merger, ATS was operated as part of
American Radio. The following table sets forth the capitalization of ATS as of
March 31, 1998, and as adjusted to give effect to (a) the ATS Pro Forma
Transactions, the CBS Merger and the Interim Financing and (b) this Offering,
as if all of the foregoing had been consummated on March 31, 1998. See Notes
to the Unaudited Pro Forma Condensed Consolidated Balance Sheet.

Management believes that the assumptions used provide a reasonable basis on
which to present such pro forma capitalization. The capitalization table below
should be read in conjunction with the historical financial statements of ATS,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Unaudited Pro Forma Condensed Consolidated Financial
Statements of American Tower Systems". The capitalization table below is
provided for informational purposes only and (i) is not necessarily indicative
of ATS's capitalization or financial condition had the transactions and events
referred to above been consummated on the date assumed, (ii) may not reflect
the capitalization or financial condition which would have resulted had ATS
been operated as a separate, independent company, and (iii) is not necessarily
indicative of ATS's future capitalization or financial condition.

<TABLE>
<CAPTION>
MARCH 31, 1998
------------------------------------------
PRO FORMA FOR ATS
PRO FORMA
TRANSACTIONS, CBS
MERGER AND PRO FORMA FOR
HISTORICAL INTERIM FINANCING THIS OFFERING
---------- ----------------- -------------
(IN THOUSANDS)
<S> <C> <C> <C>
Cash and cash equivalents........... $ 6,800 $ 7,911 $ 7,911
======== ======== ========
Interim Preferred Stock, due within
one year(1)(4)..................... $ -- $310,000 $ --
======== ======== ========
Long term debt, including current
portion(2)(3)
Borrowings under the Loan
Agreement......................... $155,500 $263,889 $195,489
Other long-term debt............... 1,650 1,650 1,650
-------- -------- --------
Total long-term debt............... 157,150 265,539 197,139
-------- -------- --------
Stockholders' equity(2)(4)
Common Stock(5)
Class A Common Stock............... 364 651 851
Class B Common Stock............... 93 91 91
Class C Common Stock............... 33 33 33
Additional paid-in capital......... 286,589 343,529 724,829
Notes receivable, due from
Stockholders...................... (49,375)
Accumulated deficit................ (4,387) (4,387) (17,487)
-------- -------- --------
Total stockholders' equity......... 233,317 339,917 708,317
-------- -------- --------
Total capitalization............... $390,467 $605,456 $905,456
======== ======== ========
</TABLE>
- --------

(1) The ARS-ATS Separation Agreement requires ATS, among other things (a) to
bear the tax consequences of the distribution by ARS to its security
holders of the Common Stock owned by it to the extent that the aggregate
amount of taxes required to be paid by ARS exceeds $20.0 million, and (b)
to bear the burden (or receive the benefit) of any closing date balance
sheet adjustments based upon the working capital and specified debt levels
of ARS. ATS issued $310.0 million of the Interim Preferred Stock and used
the proceeds to reimburse CBS for such tax liability and to pay the
commitment and other fees and other expenses of the issue and sale of the
Interim Preferred Stock. ATS intends to finance the closing date balance
sheet adjustments, if any, and the related tax reimbursements through bank
borrowings; pro forma

18
<PAGE>

effect has been given to aggregate bank borrowings of approximately $66.0
million in this capitalization table. See "Risk Factors--Relationship
between ATS and ARS--Certain Contingent Liabilities" and "Relationship
between ATS and ARS--Sharing of Tax and Other Consequences" and "--Closing
Date Adjustments".

(2) For additional information, see "Unaudited Pro Forma Condensed
Consolidated Financial Statements of ATS" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources".

(3) See Notes to Consolidated Financial Statements and "Indebtedness of ATS"
for additional information regarding the components and terms of ATS's
long-term debt. Approximately $145.5 million of additional long-term
borrowings are expected to be required (on a net basis) to finance (a) the
Recent Transactions not included in the ATS Pro Forma Transactions and (b)
the balance (approximately $84.0 million) of the maximum purchase price of
the OPM Transaction, assuming required cash flow levels are achieved. Such
borrowings do not include $12.0 million of non-recourse indebtedness
issued in connection with the Intracoastal Transaction. See "Business--
Recent Transactions--Consummated Acquisitions".

(4) Consists of (a) Preferred Stock, par value $.01 per share, authorized,
20,000,000 shares and 356,000 shares of Interim Preferred Stock issued and
outstanding (pro forma) (see Note (1) above); (b) Class A Common Stock,
par value $.01 per share, authorized 200,000,000 shares (historical),
300,000,000 shares (pro forma); shares issued and outstanding: 36,351,266
(historical), 65,137,652 (pro forma), and 85,137,652 (pro forma for this
Offering); (c) Class B Common Stock, par value $.01 per share, 50,000,000
authorized shares; shares issued and outstanding: 9,320,576 (historical)
and 9,140,363 (pro forma and pro forma for this Offering); and (d) Class C
Common Stock, par value $.01 per share, 10,000,000 authorized shares;
shares issued and outstanding: 3,295,518 (historical, pro forma and pro
forma for this Offering).

(5) The number of outstanding shares does not include, except as otherwise
indicated: (a) shares of Class A Common Stock issuable upon conversion of
Class B Common Stock or Class C Common Stock, (b) shares issuable upon
exercise of options currently outstanding to purchase an aggregate of
4,311,300 shares of Common Stock, (c) an aggregate of 4,103,014 shares of
Common Stock to be issued pursuant to the exercise of options issued in
exchange for options formerly outstanding as follows: (i) options to
purchase 682,000 shares of Common Stock of ATSI, which were exchanged for
options to purchase approximately 931,330 shares of Common Stock, (ii)
options to purchase 599,400 shares of ARS Common Stock, which were
exchanged (based on assumed relative market prices of the ARS Common Stock
and Common Stock of $64.00 per share and $20.00 per share, respectively)
for options to purchase 1,918,080 shares of Common Stock, and (iii)
options to purchase 6,500 shares of ATC Common Stock, which were exchanged
for options to purchase 1,253,604 shares of Common Stock, or (d) shares
issuable pursuant to certain pending acquisitions. See the Notes to
Consolidated Financial Statements and "Business--Recent Transactions--
Pending Acquisitions".

19
<PAGE>

DILUTION

As of March 31, 1998, the pro forma net tangible book value of ATS, after
giving effect to the ATS Pro Forma Transactions and the CBS Merger, was
negative $278.0 million or negative $3.58 per share of Common Stock. "Pro
forma net tangible book value per share" represents the amount of total pro
forma tangible assets (total) pro forma assets less pro forma goodwill and
other pro forma intangible assets of ATS reduced by the amount of total pro
forma liabilities and divided by the pro forma number of shares of Common
Stock outstanding. After giving effect to the application of the net proceeds
from the sale of 20,000,000 shares of Class A Common Stock by ATS contemplated
hereby (after deduction of the underwriting discount, estimated offering
expenses and 1% premium to redeem the Interim Preferred Stock), the as
adjusted pro forma net tangible book value of ATS as of such date would have
been positive $100.4 million or positive $1.03 per share. This represents an
immediate increase in such pro forma net tangible book value of $4.61 to
existing stockholders and an immediate dilution in net tangible book value of
$18.97 per share to new investors purchasing shares in this Offering.

The following table illustrates the dilution per share as described above:

<TABLE>
<S> <C>
Assumed public offering price per share............................ $20.00
------
Pro forma net tangible book value per share before this Offer-
ing............................................................. (3.58)
Increase attributable to this Offering........................... 4.61
------
As adjusted pro forma net tangible book value per share after this
Offering.......................................................... 1.03
------
Dilution to new investors.......................................... $18.97
======
</TABLE>

Based on the foregoing assumptions, the following table sets forth, as of
the closing of this Offering, the number of shares of Common Stock acquired
from ATS, the total consideration paid to ATS by the existing stockholders and
the new investors purchasing shares of Class A Common Stock from ATS in this
Offering and the average price per share paid by each group:

<TABLE>
<CAPTION>
SHARES OF COMMON TOTAL
STOCK ACQUIRED CONSIDERATION AVERAGE PRICE
----------------- -------------- PER SHARE OF
NUMBER(1) PERCENT $(1) PERCENT COMMON STOCK
--------- ------- ------ ------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders(2).... 77,574 80% $344.3 46% $ 4.44
New investors............... 20,000 20 400.0 54 20.00
------ --- ------ --- ------
Total(1).................. 97,574 100% $744.3 100% $ 7.63
====== === ====== === ======
</TABLE>

(1) In Thousands

(2) Pro forma to reflect the ATS Pro Forma Transactions and the CBS Merger.

20
<PAGE>

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF ATS

The following unaudited pro forma condensed consolidated financial
statements of ATS consist of an unaudited pro forma condensed consolidated
balance sheet as of March 31, 1998 and an unaudited pro forma condensed
consolidated statement of operations for the three months ended March 31, 1998
and the year ended December 31, 1997 adjusted for the ATS Pro Forma
Transactions, the CBS Merger including the issuance of $310.0 million of
Interim Preferred Stock and payments required under the ARS-ATS Separation
Agreement, and this Offering, as if such transactions had been consummated on
January 1, 1998 and January 1, 1997, respectively, with respect to the
unaudited pro forma condensed consolidated statements of operations, and March
31, 1998 with respect to the unaudited pro forma condensed consolidated
balance sheet. With respect to acquisitions, the pro forma statements give
effect only to the ATS Pro Forma Transactions based on their significance in
relation to all of ATS's acquisitions and, therefore, do not include all
Recent Transactions. The unaudited pro forma condensed consolidated balance
sheet and the unaudited pro forma condensed consolidated statements of
operations should be read in conjunction with American Tower Systems's
consolidated financial statements and notes thereto, as well as the financial
statements and notes thereto of certain businesses that have been or may be
acquired, which are included elsewhere in this Prospectus. The unaudited pro
forma condensed consolidated balance sheet and the unaudited pro forma
condensed consolidated statement of operations are not necessarily indicative
of the financial condition or the results of operations that would have been
reported had such events actually occurred on the date specified, nor are they
indicative of the results of operations that would have resulted had ATS been
operated as a separate, independent company during such periods, and are not
necessarily indicative of ATS's future financial conditions or results of
operations.

In reviewing the unaudited pro forma condensed consolidated financial
statements set forth below, in addition to the assumptions and other matters
noted in the above paragraph and in the notes to the unaudited pro forma
condensed consolidated financial statements, it should be noted that estimated
incremental costs that will be incurred because ATS will be an independent
company have been reflected in the pro forma adjustments. However, there can
be no assurance that actual incremental costs for such independent operation
will not exceed such estimated amounts.

21
<PAGE>

AMERICAN TOWER SYSTEMS CORPORATION

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

MARCH 31, 1998
(IN THOUSANDS)

<TABLE>
<CAPTION>
ADJUSTMENTS PRO FORMA
FOR ATS FOR ATS
PRO FORMA PRO FORMA
TRANSACTIONS TRANSACTIONS
AND CBS AND CBS ADJUSTMENTS FOR
HISTORICAL MERGER(A) MERGER(A) THIS OFFERING(B) PRO FORMA
---------- ------------ ------------ ---------------- ----------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and cash equiva-
lents.................. $ 6,800 $ 1,111 $ 7,911 $ 7,911
Accounts receivable,
net.................... 5,742 1,084 6,826 6,826
Other current assets.... 4,427 984 5,411 5,411
Notes receivable........ 1,000 1,000 1,000
Property and equipment,
net.................... 156,827 125,788 282,615 282,615
Intangible assets, net.. 229,189 388,750 617,939 $ (10,000) 607,939
Deferred income taxes... 123,273 123,273 123,273
Deposits and other as-
sets................... 5,756 5,756 5,756
-------- --------- ---------- --------- ----------
Total.................. $533,014 $ 517,717 $1,050,731 $ (10,000) $1,040,731
======== ========= ========== ========= ==========
LIABILITIES AND STOCK-
HOLDERS' EQUITY
Current liabilities, ex-
cluding current portion
of long-term debt...... $141,914 $(121,031) $ 20,883 $ 20,883
Interim preferred stock,
due within one year.... 310,000 310,000 $(310,000) --
Deferred income taxes... 113,575 113,575 113,575
Other long-term liabili-
ties................... 33 184 217 217
Long-term debt, includ-
ing current portion.... 157,150 108,389 265,539 (68,400) 197,139
Minority interest in
subsidiaries........... 600 600 600
Stockholders' equity.... 233,317 106,600 339,917 368,400 708,317
-------- --------- ---------- --------- ----------
Total.................. $533,014 $ 517,717 $1,050,731 $ (10,000) $1,040,731
======== ========= ========== ========= ==========
</TABLE>

See Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet of
American Tower Systems.

22
<PAGE>

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

The unaudited pro forma condensed consolidated balance sheet as of March 31,
1998 gives effect to the consummation of the ATC Merger (collectively, with
the Diablo Transaction, the Meridian Transaction, the MicroNet Transaction,
the Gearon Transaction, the OPM Transaction, the Tucson Transaction, the
Transfer of Towers from ARS to ATS, and the transactions contemplated by the
Stock Purchase Agreement, the "ATS Pro Forma Transactions"), the CBS Merger
(including the issuance of $310.0 million of Interim Preferred Stock and
payments required under the ARS-ATS Separation Agreement) and this Offering,
as if each of the foregoing had occurred on March 31, 1998. See "Business--
Recent Transactions" for a description of each of the transactions included in
the ATS Pro Forma Transactions.

(a) The following table sets forth the pro forma balance sheet adjustments
with respect to the ATS Pro Forma Transactions (the ATC Merger being the only
then-unconsummated ATS Pro Forma Transaction) and the CBS Merger as of March
31, 1998. (In thousands).

<TABLE>
<CAPTION>
ATC CBS
MERGER(I) MERGER(II) TOTAL
--------- ---------- ---------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents...................... $ 1,111 $ 1,111
Accounts receivable, net....................... 1,084 1,084
Other current assets........................... 984 984
Property and equipment, net.................... 125,788 125,788
Intangible assets, net......................... 378,750 $ 10,000 388,750
-------- --------- ---------
Total......................................... $507,717 $ 10,000 $ 517,717
======== ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities, excluding current portion
of long-term debt............................. $ 3,969 $(125,000) $(121,031)
Interim preferred stock, due within one year... 310,000 310,000
Deferred income taxes.......................... 113,575 113,575
Other long-term liabilities.................... 184 184
Long-term debt, including current portion...... 91,789 66,000 157,789
Stockholders' equity........................... 298,200 (241,000) 57,200
-------- --------- ---------
Total......................................... $507,717 $ 10,000 $ 517,717
======== ========= =========
</TABLE>

(i) In connection with the ATC Merger, a deferred tax liability of $113.6
million will be established for the differences in bases for book and tax
purposes resulting from the transaction. The working capital deficiency of
ATC at March 31, 1998 ($1.0 million) has also been recorded as a pro forma
adjustment.

(ii) The ARS-ATS Separation Agreement requires ATS to reimburse CBS on a
"make-whole" (after tax) basis for the tax liabilities to be incurred by
ARS attributable to the distribution of the Common Stock to the ARS
security holders and certain related transactions to the extent that the
aggregate amount of taxes required to be paid by ARS exceeds $20.0
million. The amount of that tax liability is dependent on the "fair
market value" of the Class A Common Stock at the time of the consummation
of the CBS Merger. Assuming the "fair market value" of ARS's stock
interest in ATS was equal to $20 11/16 per share, the last reported sale
price of such stock in the "when-issued" market on May 22, 1998, the
total estimated tax reimbursement ATS would be required to make would be
between approximately $270.0 and $300.0 million, depending on applicable
state tax rates. Such estimate gives effect to deductions of
approximately $88.0 million, based on such closing price, available to
ARS as a consequence of stock option cancellations contemplated by the
CBS Merger. The tax reimbursement would change by between approximately
$20.5 and $22.5 million, again depending on applicable state tax rates,
for each $1.00 change in the "fair market value" of the ATS Common Stock
under the tax reporting position to be followed. The estimates described
above are based on a number of assumptions and interpretations of various
applicable income tax rules and are subject to change. For information
with respect to possible challenges by the Internal Revenue Service (or
other taxing authorities) to ATS's positions with respect to such tax
liability, see "Risk Factors--Relationship between ATS and ARS--Certain
Contingent Liabilities". See also "Relationship between ATS and ARS--
Sharing of Tax and Other Consequences". ATS has entered into an Interim
Financing Agreement with respect to the Interim Financing providing for
the issuance and sale by ATS of up to $400.0 million of Interim Preferred
Stock in order to finance ATS's obligation to CBS with respect to tax
reimbursement. Pursuant to such agreement, in June 1998, ATS issued
$310.0 million of the Interim Preferred Stock and used the proceeds to
fund its tax reimbursement obligation and to pay the commitment and other
fees and other expenses of the issue and sale of the Interim Preferred
Stock. The proceeds of this Offering will be used principally to redeem
the Interim Preferred Stock at a price equal to 101% of the liquidation
preference together with accrued and unpaid dividends.

23
<PAGE>

The ARS-ATS Separation Agreement also provides for closing date balance
sheet adjustments based upon the working capital (current assets less
defined liabilities) and specified debt levels of ARS. ATS will benefit from
or bear the cost of such adjustments. ATS's preliminary estimate of such
adjustments is that it will not be required to make a payment of more than
$40.0 million and that, in addition, it will be required to reimburse CBS
for the tax consequences of such payment which would result in additional
liability of ATS of approximately $26.0 million (assuming a $40.0 million
adjustment payment) under the tax reporting method to be followed. ATS
intends to finance such obligations through bank borrowings; pro forma
effect has been given to aggregate bank borrowings of approximately $66.0
million in the pro forma balance sheet. Since the amounts of working capital
and debt are dependent upon the uncertainty, among other things, of recent
operating results and cash capital expenditures as well as CBS Merger
expenses and the interpretation and intent of certain provisions of the CBS
Merger Agreement as to which certain issues between ATS and CBS exist, ATS
is unable to state definitively what payments, if any, will be owed by ATS.
See "Risk Factors--Relationship Between ATS and ARS--Certain Contingent
Liabilities" and "Relationship between ATS and ARS--Closing Date
Adjustments".

In connection with an inter-corporate taxable transfer of assets entered
into in January 1998 by ATS in contemplation of the separation of ATS and ARS,
a portion of the tax with respect to which ATS is obligated to indemnify CBS
was incurred. Such transfer resulted in an increase in the tax bases of ATS's
assets of approximately $330.0 million. ATS will have potential depreciation
and amortization deductions over the next 15 years of $22.0 million per year
and recorded a deferred tax asset of approximately $125.0 million to reflect
this.

All of the ATS Pro Forma Transactions (other than the Transfer of Towers)
have been or will be accounted for under the purchase method of accounting.
The Transfer of Towers from ARS to ATS will be recorded at the historical
depreciated net book value of such towers on the books of ARS on the date of
transfer.

The following table describes the financing of the transactions described
above.

<TABLE>
<CAPTION>
PURCHASE BORROWINGS BY COMMON STOCK
PRICE ATS ISSUED BY ATS
-------- ------------- -------------
(IN THOUSANDS)
<S> <C> <C> <C>
Tucson Transaction..................... $12,000 $12,000
Gearon Transaction..................... 80,000(i) 32,000 $48,000(i)
OPM Transaction........................ 21,306 21,306
ATC Merger............................. 504,538(ii) 91,789 288,421(ii)
</TABLE>
- --------
(i) Purchase price included approximately 5.3 million shares valued at $9.00
per share.
(ii) Purchase price includes approximately 28.8 million shares valued at
$10.00 per share, the estimated fair value when the ATC Merger Agreement
was signed.

On January 22, 1998, ATS issued Common Stock pursuant to the Stock Purchase
Agreement for an aggregate of $80.0 million, $79.4 million net of expenses (of
which approximately $49.4 million was paid in the form of secured notes due
and paid upon consummation of the CBS Merger and the balance in cash).

ATS issued or expects to issue a total of 62,175,476 shares of Common Stock
to effect all of the transactions described above. The following shares have
been or will be issued: the Gearon Transaction (5,333,333), the ATC Merger
(28,842,143), the Stock Purchase Agreement (8,000,000), and this Offering
(20,000,000).

While the ATS Pro Forma Transactions do not constitute all of the Recent
Transactions, management believes that the impact of the Recent Transactions
that are not included in the pro forma financial information on revenues,
expenses and income from continuing operations, when compared to those that
are so included, is not likely to be material. The ATS Pro Forma Transactions,
exclusive of the ATC Merger, represented approximately 80% of the more than
550 sites acquired since January 1, 1997 and 85% of the aggregate purchase
price thereof. In addition, the ATC Merger (which is included in the ATS Pro
Forma Transactions) represented the acquisition of more than 900
communications sites (including ATC's pending acquisitions involving
approximately 60 sites) for approximately 30.1 million shares of Class A
Common Stock and the repayment of

<PAGE>

approximately $125.0 million of debt. For information with respect to other
acquisitions which are not included in the ATS Pro Forma Transactions and are,
in the aggregate, of materially less significance than the ATC Merger, see
"Business--Recent Transactions--Consummated Acquisitions" and "--Pending
Acquisitions".

(b) To record the effect of the issuance of 20,000,000 shares of Common
Stock and the net proceeds (approximately $381.5 million, assuming an offering
price of $20.00 per share) of this Offering less the write-off of issuance
costs related to the Interim Preferred Stock ($10.0 million) and a 1% premium
to redeem the Interim Preferred Stock ($3.1 million).

25
<PAGE>

AMERICAN TOWER SYSTEMS CORPORATION

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
ADJUSTMENTS PRO FORMA FOR
FOR ATS PRO ATS PRO
FORMA FORMA
TRANSACTIONS TRANSACTIONS
AND CBS AND CBS ADJUSTMENTS FOR
HISTORICAL MERGER(A) MERGER THIS OFFERING(B) PRO FORMA
---------- ------------ ------------- ---------------- ---------
<S> <C> <C> <C> <C> <C>
Net revenues............ $17,508 $ 77,414 $ 94,922 $ 94,922
Operating expenses...... 8,713 41,469 50,182 50,182
Depreciation and
amortization........... 6,326 48,626 54,952 54,952
Corporate general and
administrative
expenses............... 1,536 3,000 4,536 4,536
------- -------- -------- --------
Operating income
(loss)................. 933 (15,681) (14,748) (14,748)
------- -------- -------- --------
Other expense:
Interest expense,
net.................. 2,789 58,362 61,151 $(50,733) 10,418
Other expense......... 15 15 15
Minority interest in
net earnings of
subsidiaries......... 178 178 178
------- -------- -------- -------- --------
Total other expense
(income)........... 2,982 58,362 61,344 (50,733) 10,611
------- -------- -------- -------- --------
Income (loss) before
income taxes........... (2,049) (74,043) (76,092) 50,733 (25,359)
Income tax benefit
(provision)............ 473 6,542(c) 7,015 (2,219)(c) 4,796
------- -------- -------- -------- --------
Income (loss) before
extraordinary item..... $(1,576) $(67,501) $(69,077) $ 48,514 $(20,563)
======= ======== ======== ======== ========
Pro forma basic and
diluted loss per common
share before
extraordinary item..... $ (0.89) $ (0.21)
======== ========
Pro forma common shares
outstanding(d)......... 77,574 20,000 97,574
======== ======== ========
</TABLE>

See Notes to Unaudited Pro Forma Condensed Consolidated Statement of Operations
of American Tower Systems.

26
<PAGE>

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

The unaudited pro forma condensed consolidated statement of operations for
the year ended December 31, 1997 gives effect to the ATS Pro Forma
Transactions, the CBS Merger and this Offering, as if each of the foregoing
had occurred on January 1, 1997.

(a) To record the results of operations for the ATS Pro Forma Transactions
and the CBS Merger. The results of operations have been adjusted to: (i)
reverse historical interest expense of $6.5 million; (ii) record interest
expense of $7.9 million for the year ended December 31, 1997, as a result of
approximately $61.0 million of additional net debt to be incurred in
connection with the ATS Pro Forma Transactions, after giving effect to the
proceeds from the issuance of Common Stock pursuant to the Stock Purchase
Agreement for an aggregate purchase price of $80.0 million, $79.4 million net
of expenses (of which approximately $49.4 million was paid in the form of
secured notes (which were paid upon consummation of the CBS Merger) and the
balance in cash); (iii) record additional interest expense related to
dividends on the Interim Preferred Stock at an effective annual rate of 11.35%
and the amortization of the estimated issuance costs incurred in connection
with issuance of the Interim Preferred Stock for the entire period presented;
and (iv) record interest expense related to additional long-term borrowings
incurred to pay an estimated closing date balance sheet adjustment, including
related tax reimbursement, of approximately $66.0 million. Because the Interim
Preferred Stock is required to be redeemed in one year, ATS has elected to
reflect the dividend as interest expense. Each 1/4% change in the interest
rate applicable to the change in floating rate debt would increase or
decrease, as appropriate, the net adjustment to interest expense by
approximately $0.2 million. The estimated tax liability shown in clause (iii)
which will be initially financed through the issuance of the Interim Preferred
Stock is dependent on the "fair market value" of the Class A Common Stock at
the time of the consummation of the CBS Merger. ATS's estimates of that tax
liability is based on the assumption that the "fair market value" of the
Common Stock distributed by ARS was $20 11/16 per share, the last reported
sale price of such stock in the "when-issued" market on May 22, 1998. Such tax
liability has a direct effect on the amount of Interim Preferred Stock to be
issued and would change by between approximately $20.5 and $22.5 million,
depending on applicable state tax rates, for each $1.00 per share change in
the "fair market value" of the Class A Common Stock. For information with
respect to possible challenges by the Internal Revenue Service (or other
taxing authorities) to ATS's positions with respect to such tax liability, see
"Risk Factors--Relationship between ATS and ARS--Certain Contingent
Liabilities". See also "Relationship between ATS and ARS--Sharing of Tax and
Other Consequences". The estimated adjustment shown in clause (iv) is to give
effect to certain adjustment provisions in the ARS-ATS Separation Agreement
that relate to closing date balance sheet adjustments based upon the working
capital (current assets less defined liabilities) and specified debt levels of
ARS. ATS will benefit from or bear the cost of such adjustments. Since the
amounts of working capital and debt are dependent upon the uncertainty, among
other things, of recent operating results and cash capital expenditures as
well as CBS Merger expenses and the interpretation and intent of certain
provisions of the CBS Merger Agreement as to which certain issues between ATS
and CBS exist, ATS is unable to state definitively what payments, if any, will
be owed by ATS to ARS. See "Risk Factors--Relationship Between ATS and ARS--
Certain Contingent Liabilities" and "Relationship between ATS and ARS--Closing
Date Adjustments".

The results of operations have also been adjusted to reverse historical
depreciation and amortization expense of $9.1 million for the year ended
December 31, 1997 and record depreciation and amortization expense of $48.6
million for the year ended December 31, 1997 based on estimated allocations of
purchase prices. Depreciation expense for property, plant and equipment
acquired has been determined based on an average life of 15 years. Costs of
acquired intangible assets for the transactions are amortized over 15 years.
The preliminary estimates of the fair value of property, plant and equipment
and intangible assets may change upon final appraisal. The depreciation
adjustment also includes the effects of the assumed transfer by ARS to ATS of
16 towers with a historical net book value of $4.2 million, representing an
additional equity investment in ATS by ARS.

A portion of corporate general and administrative expenses of the prior
owners has not been carried forward into the pro forma condensed financial
statements as these costs represent duplicative facilities and compensation

27
<PAGE>

(a) continued

to owners and/or executives not retained by ATS. Because ATS already maintains
its own separate corporate headquarters which provides services substantially
similar to those represented by these costs, they are not expected to recur
following the acquisition. After giving effect to an estimated $3.0 million of
incremental costs, ATS believes that it has existing management capacity
sufficient to provide such services without incurring additional incremental
costs.

The following table sets forth the historical results of operations for the
ATS Pro Forma Transactions and the CBS Merger for the year ended December 31,
1997 (In Thousands).

<TABLE>
<CAPTION>
MERIDIAN DIABLO MICRONET TUCSON GEARON OPM
TRANSACTION TRANSACTION TRANSACTION TRANSACTION TRANSACTION TRANSACTION
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net revenues............ $ 2,385 $6,957 $15,103 $ 1,460 $ 29,930 $ 863
Operating expenses...... 1,730 4,876 8,695 453 19,688 1,146
Depreciation and
amortization........... 211 393 2,626 166 186 428
Corporate general and
administrative......... 500 488
------- ------ ------- -------- -------- --------
Operating income
(loss)................. 444 1,188 3,782 841 10,056 (1,199)
Other (income) expense:
Interest expense, net.. 80 110 198 636
Other expense (in-
come)................. (133) (34) (12) (95) (16)
------- ------ ------- -------- -------- --------
Income (loss) from oper-
ations before income
taxes.................. $ 364 $1,211 $ 3,816 $ 655 $ 10,151 $ (1,819)
======= ====== ======= ======== ======== ========
<CAPTION>
STOCK
TRANSFER OF PURCHASE PRO FORMA
ATC MERGER TOWERS AGREEMENT CBS MERGER ADJUSTMENTS TOTAL
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net revenues............ $20,006 $ 710 $ 77,414
Operating expenses...... 4,138 743 41,469
Depreciation and
amortization........... 4,903 215 $ 39,498 48,626
Corporate general and
administrative......... 3,183 (1,171) 3,000
------- ------ -------- --------
Operating income
(loss)................. 7,782 (248) (38,327) (15,681)
Other (income) expense:
Interest expense (in-
come), net............ 5,439 $(6,352) $ 50,465(i) 7,786 58,362
Other expense (in-
come)................. 514 (224)
------- ------ ------- -------- -------- --------
Income (loss) from oper-
ations before income
taxes.................. $ 1,829 $ (248) $ 6,352 $(50,465) $(45,889) $(74,043)
======= ====== ======= ======== ======== ========
</TABLE>

(i) Assumes the Interim Preferred Stock remains outstanding during the entire
period presented and full amortization of deferred issuance costs.

(b) To record the elimination of the Interim Preferred Stock dividends and
repayment of approximately $68.4 million of debt with proceeds from this
Offering. An extraordinary loss aggregating $13.1 million relating to the
redemption of the Interim Preferred Stock has not been reflected.

(c) To record the tax effect of the pro forma adjustments and impact on
ATS's estimated effective tax rate. The actual effective tax rate may be
different once the final allocation of purchase price is determined.

(d) Includes shares issued or expected to be issued pursuant to the Gearon
Transaction (5,333,333), the ATC Merger (28,842,143), the Stock Purchase
Agreement (8,000,000), and this Offering (20,000,000).

28
<PAGE>

AMERICAN TOWER SYSTEMS CORPORATION

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 1998
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
ADJUSTMENTS PRO FORMA FOR
FOR ATS PRO ATS PRO
FORMA FORMA
TRANSACTIONS TRANSACTIONS
AND CBS AND CBS ADJUSTMENTS FOR
HISTORICAL MERGER(A) MERGER THIS OFFERING(B) PRO FORMA
---------- ------------ ------------- ---------------- ---------
<S> <C> <C> <C> <C> <C>
Net revenues............ $17,925 $ 7,164 $ 25,089 $25,089
Operating expenses...... 11,495 2,392 13,887 13,887
Depreciation and
amortization........... 5,802 8,767 14,569 14,569
Corporate general and
administrative
expenses............... 541 1,000 1,541 1,541
------- -------- -------- -------
Operating income
(loss)................. 87 (4,995) (4,908) (4,908)
------- -------- -------- -------
Other expense:
Interest expense,
net.................. 1,565 21,943 23,508 $(20,044) 3,464
Other expense.........
Minority interest in
net earnings of
subsidiaries......... 79 79 79
------- -------- -------- -------- -------
Total other expense
(income)........... 1,644 21,943 23,587 (20,044) 3,543
------- -------- -------- -------- -------
Income (loss) before
income taxes........... (1,557) (26,938) (28,495) 20,044 (8,451)
Income tax benefit
(provision)............ 30 2,558 2,588 (547) 2,041
------- -------- -------- -------- -------
Income (loss) before
extraordinary item..... $(1,527) $(24,380) ($25,907) $ 19,497 $(6,410)
======= ======== ======== ======== =======
Pro forma basic and
diluted loss per common
share before
extraordinary item..... $ (0.33) $ (0.07)
======== =======
Pro forma common shares
outstanding(d)......... 77,574 20,000 97,574
======== ======== =======
</TABLE>

See Notes to Unaudited Pro Forma Condensed Consolidated Statement of Operations
of American Tower Systems.

29
<PAGE>

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

The unaudited pro forma condensed consolidated statement of operations for
the three months ended March 31, 1998 gives effect to the ATS Pro Forma
Transactions, the CBS Merger and this Offering, as if each of the foregoing
had occurred on January 1, 1998.

(a) To record the results of operations for the ATS Pro Forma Transactions
and the CBS Merger. The results of operations have been adjusted to: (i)
reverse historical interest expense of $1.8 million; (ii) record interest
expense of $2.0 million for the three months ended March 31, 1998, as a result
of approximately $42.4 million of additional net debt to be incurred in
connection with the ATS Pro Forma Transactions, after giving effect to the
proceeds from the issuance of Common Stock pursuant to the Stock Purchase
Agreement for an aggregate purchase price of $80.0 million, $79.4 million net
of expenses (of which approximately $49.4 million was paid in the form of
secured notes (which were paid upon consummation of the CBS Merger) and the
balance in cash); (iii) record additional interest expense related to
dividends on the Interim Preferred Stock at an effective annual rate of 11.35%
and the amortization of the estimated issuance costs incurred in connection
with issuance of the Interim Preferred Stock for the entire period presented;
and (iv) record interest expense related to additional long-term borrowings
incurred to pay an estimated closing date balance sheet adjustment, including
related tax reimbursement, of approximately $66.0 million. Because the Interim
Preferred Stock is required to be redeemed in one year, ATS has elected to
reflect the dividend as interest expense. Each 1/4% change in the interest
rate applicable to the change in floating rate debt would increase or
decrease, as appropriate, the net adjustment to interest expense by
approximately $0.03 million. The estimated tax liability shown in clause (iii)
which will be initially financed through the issuance of the Interim Preferred
Stock is dependent on the "fair market value" of the Class A Common Stock at
the time of the consummation of the CBS Merger. ATS's estimates of that tax
liability is based on the assumption that the "fair market value" of the
Common Stock distributed by ARS was $20 11/16 per share, the last reported
sale price of such stock in the "when-issued" market on May 22, 1998. Such tax
liability has a direct effect on the amount of Interim Preferred Stock to be
issued and would change by between approximately $20.5 and $22.5 million,
depending on applicable state tax rates, for each $1.00 per share change in
the "fair market value" of the Class A Common Stock. For information with
respect to possible challenges by the Internal Revenue Service (or other
taxing authorities) to ATS's positions with respect to such tax liability, see
"Risk Factors--Relationship between ATS and ARS--Certain Contingent
Liabilities". See also "Relationship between ATS and ARS--Sharing of Tax and
Other Consequences". The estimated adjustment shown in clause (iv) is to give
effect to certain adjustment provisions in the ARS-ATS Separation Agreement
that relate to closing date balance sheet adjustments based upon the working
capital (current assets less defined liabilities) and specified debt levels of
ARS. ATS will benefit from or bear the cost of such adjustments. Since the
amounts of working capital and debt are dependent upon the uncertainty, among
other things, of recent operating results and cash capital expenditures as
well as CBS Merger expenses and the interpretation and intent of certain
provisions of the CBS Merger Agreement as to which certain issues between ATS
and CBS exist, ATS is unable to state definitively what payments, if any, will
be owed by ATS to ARS. See "Risk Factors--Relationship Between ATS and ARS--
Certain Contingent Liabilities" and "Relationship between ATS and ARS--Closing
Date Adjustments".

The results of operations have also been adjusted to reverse historical
depreciation and amortization expense of $1.8 million for the three months
ended March 31, 1998 and record depreciation and amortization expense of $8.7
million for the three months ended March 31, 1998 based on estimated
allocations of purchase prices. Depreciation expense for property, plant and
equipment acquired has been determined based on an average life of 15 years.
Costs of acquired intangible assets for the transactions are amortized over 15
years. The preliminary estimates of the fair value of property, plant and
equipment and intangible assets may change upon final appraisal. The
depreciation adjustment also includes the effects of the transfer by ARS to
ATS of 16 towers with a historical net book value of $4.2 million,
representing an additional equity investment in ATS by ARS.

30
<PAGE>

(a) continued

The following table sets forth the historical results of operations for the
ATS Pro Forma Transactions (that were unconsummated as of January 1, 1998) and
the CBS Merger for the three months ended March 31, 1998. (In thousands).

<TABLE>
<CAPTION>
GEARON ATC CBS PRO FORMA
TRANSACTION MERGER MERGER ADJUSTMENTS TOTAL
----------- ------ -------- ----------- --------
<S> <C> <C> <C> <C> <C>
Net revenues............. $ 904 $6,260 $ 7,164
Operating expenses....... 1,087 1,305 2,392
Depreciation and amorti-
zation.................. 19 1,755 $ 6,993 8,767
Corporate general and ad-
ministrative............ 862 138 1,000
----- ------ -------- ------- --------
Operating income (loss).. (202) 2,338 (7,131) (4,995)
Other (income) expense:
Interest expense (in-
come), net............ (17) 1,791 $ 19,978(i) 191 21,943
Other expense (in-
come)................. 574 (574)
----- ------ -------- ------- --------
Income (loss) from opera-
tions before income tax-
es...................... $(759) $ 547 $(19,978) $(6,748) $(26,938)
===== ====== ======== ======= ========
</TABLE>

(i) Assumes the Interim Preferred Stock remains outstanding during the entire
period presented and full amortization of deferred issuance costs.

31
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

GENERAL

This discussion contains "forward-looking statements," including statements
concerning projections, plans, objectives, future events or performance and
underlying assumptions and other statements which are other than statements of
historical fact. ATS wishes to caution readers that certain important factors
may have affected and could in the future affect ATS's actual results and
could cause ATS's actual results for subsequent periods to differ materially
from those expressed in any forward-looking statement made by or on behalf of
ATS. These important factors include, among others, the risk factors set forth
herein under "Risk Factors". The discussion should be read in conjunction with
the American Tower Systems Consolidated Financial Statements and the notes
thereto contained elsewhere in this Prospectus. As ATS was a wholly-owned
subsidiary of American Radio during the periods presented, the consolidated
financial statements may not reflect the results of operations or financial
position of ATS had it been an independent, public company during such
periods. Because of ATS's relatively brief operating history and the large
number of recent acquisitions, the following discussion, which relates solely
to ATS on an historical basis and does not include acquired companies, and is
presented to satisfy certain disclosure requirements of the Securities and
Exchange Commission (the "SEC" or the "Commission"), will not necessarily
reveal any significant developing or continuing trends. See "Business--Growth
Strategy".

ATS was formed in July 1995 to capitalize on the opportunity in the
communications site industry. ATS is a leading independent owner and operator
of wireless communications towers in the United States. On a pro forma basis,
ATS currently owns and operates more than 1,800 towers in 44 states and the
District of Columbia. ATS's rapid growth is a result primarily of numerous
strategic acquisitions during 1996 and 1997. During 1996, ATS acquired
approximately 15 communications sites and site management businesses involving
approximately 250 sites for an aggregate purchase price of approximately $21.0
million. During 1997, its acquisition and construction activity accelerated
and ATS acquired or constructed approximately 400 communications sites (and
related site management businesses) and its initial site acquisition and
voice, video and data transmission businesses. Since January 1, 1998,
exclusive of the ATC Merger, ATS has acquired approximately 150 communications
sites, a major site acquisition business, and a third teleport. The ATC Merger
involved the acquisition of approximately 900 communications sites (including
pending acquisitions of approximately 60 sites) in exchange for the issuance
of approximately 30.1 million shares of Class A Common Stock and the repayment
of approximately $125.0 million of debt. ATS has acquisitions pending for
approximately 40 additional towers.

RESULTS OF OPERATIONS

Management expects that acquisitions consummated to date, particularly the
ATC Merger, will have a material impact on future revenues, expenses and
income from continuing operations. As indicated in the Unaudited Pro Forma
Condensed Consolidated Statement of Operations for the three months ended
March 31, 1998 and the year ended December 31, 1997, there is a dramatic
difference between the historical results and the pro forma results for each
of the foregoing items. The notes to the Unaudited Pro Forma Condensed
Consolidated Statement of Operations for the three months ended March 31, 1998
and the year ended December 31, 1997 indicate the effect of certain of the
acquisitions, and their impact on revenues, expenses and income from
continuing operations. In that connection, the increase in operating expenses
and, to a greater extent, depreciation and amortization, each as a percentage
of net revenues in the pro forma information compared to the historical
information, should be noted. While the ATS Pro Forma Transactions do not
constitute all of the Recent Transactions, management believes that the impact
of the Recent Transactions that are not included in the pro forma financial
information on revenues, expenses and income from continuing operations, when
compared to those that are so included, is not likely to be material. The ATS
Pro Forma Transactions, exclusive of the ATC Merger, represent approximately
80% of the more than 550 communications sites acquired since January 1, 1997
and ATS's site acquisition and voice, video and data transmission businesses,
and 85% of the aggregate purchase price thereof. In addition, the ATC Merger
(which is included in the ATS Pro Forma Transactions) represented

32
<PAGE>

the acquisition of more than 900 communications sites (including pending
acquisitions of approximately 60 sites) for approximately 30.1 million shares
of Class A Common Stock and the repayment of approximately $125.0 million of
debt. For information with respect to other pending acquisitions which are not
included in the ATS Pro Forma Transactions and are, in the aggregate, of
materially less significance than the ATC Merger, see "Business--Recent
Transactions--Pending Acquisitions". Finally, the impact of the construction
program of ATS is not reflected to any significant extent in the pro forma
information because most of that activity is of more recent origin and is
expected to accelerate substantially in 1998. Management believes that
potential investors should be aware of the dramatic changes in the nature and
scope of ATS's business in reviewing the ensuing discussion of comparative
historical results.

THREE MONTHS ENDED MARCH 31, 1998 AND 1997 (DOLLARS IN THOUSANDS)

As of March 31, 1998, ATS operated approximately 880 communications sites
principally in the Northeast and Mid-Atlantic regions, Florida and California.
As of March 31, 1997, ATS operated approximately 270 communications sites,
principally in the Northeast and Mid-Atlantic regions and Florida. See the
Notes to the Consolidated Financial Statements for a description of the
acquisitions consummated in 1998. These transactions have significantly
affected operations for the three months ended March 31, 1998 as compared to
the three months ended March 31, 1997.

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31, AMOUNT OF PERCENTAGE
--------------- INCREASE INCREASE
1997 1998 (DECREASE) (DECREASE)
------ ------- ---------- ----------
<S> <C> <C> <C> <C>
Tower rental and management revenues... $1,365 $ 9,493 $ 8,128 595.5%
Site acquisition service revenues...... -- 5,275 5,275
Video, voice and data transmission rev-
enues................................. -- 3,142 3,142
Other.................................. 1 15 14 1,400.0%
------ ------- ------- -------
Total operating revenues............... 1,366 17,925 16,559 1,212.2%
------ ------- ------- -------
Tower rental and management expenses... 538 4,899 4,361 810.6%
Site acquisition service expenses...... -- 4,544 4,544
Video, voice and data transmission ex-
penses................................ -- 2,052 2,052
------ ------- ------- -------
Operating expenses excluding deprecia-
tion and amortization and corporate
general and administrative expenses... 538 11,495 10,957 2,036.6%
------ ------- ------- -------
Depreciation and amortization.......... 504 5,802 5,298 1,051.2%
Corporate general and administrative
expenses.............................. 280 541 261 93.2%
Interest expense, net.................. 71 1,565 1,494 2,104.2%
Minority interest in net earnings of
subsidiaries.......................... 80 79 (1) (1.3)%
Income tax benefit..................... 49 30 (19) (38.8)%
------ ------- ------- -------
Net loss............................... $ (58) $(1,527) $ 1,469 2,532.8%
====== ======= ======= =======
Tower cash flow........................ $ 828 $ 6,430 $ 5,602 676.6%
====== ======= ======= =======
EBITDA................................. $ 548 $ 5,889 $ 5,341 974.6%
====== ======= ======= =======
</TABLE>

As noted above, ATS consummated numerous acquisitions in 1997 and 1998, many
of which were of a material size. Except as explained below, substantially all
of the increases indicated in the above table were attributable to the impact
of these communications sites and related business acquisitions, principally
those that occurred in 1997 and 1998. The increase in site acquisition service
revenues and expenses is attributable to the Gearon acquisition that occurred
in January 1998, and, to a substantially lesser extent, the impact of a May
1997 acquisition of two similar businesses. The increase in video, voice and
data transmission revenues and expenses is attributable to an acquisition that
occurred in October 1997. The increase in depreciation and amortization is
primarily attributable to the increase in depreciable and amortizable assets
resulting from the 1997 and 1998 acquisitions, and, to a substantially lesser
extent, completed construction projects. The increase in corporate

33
<PAGE>

general and administrative expense is primarily attributable to the higher
personnel costs associated with supporting ATS's greater number of tower
properties and growth strategy. The increase in interest expense, net, relates
to higher borrowing levels which were used to finance 1998 and, to a
substantially lesser extent, 1997 acquisitions. The minority interest in net
earnings of subsidiaries represents the elimination of the minority
stockholders' earnings of consolidated subsidiaries. The effective tax rate
benefit for the three months ended March 31, 1998 was approximately 2% as
compared to 45% for the three months ended March 31, 1997. The effective rate
benefit in 1998 is due to the effect of non-deductible items, principally
amortization of goodwill, on certain stock acquisitions for which no tax
benefit was recorded.

YEAR ENDED DECEMBER 31, 1997 AND 1996 (DOLLARS IN THOUSANDS)

As of December 31, 1997, ATS operated approximately 670 communications sites
principally in the Northeast and Mid-Atlantic regions, Florida and California.
As of December 31, 1996, ATS operated approximately 270 communications sites,
principally in the Northeast and Mid-Atlantic regions and Florida. See the
Notes to Consolidated Financial Statements for a description of the
acquisitions consummated in 1997 and 1996. These transactions have
significantly affected operations for the year ended December 31, 1997 as
compared to the year ended December 31, 1996.

<TABLE>
<CAPTION>
AMOUNT OF PERCENTAGE
INCREASE INCREASE
1996 1997 (DECREASE) (DECREASE)
------ ------- ---------- ----------
<S> <C> <C> <C> <C>
Tower rental and management revenues............... $2,817 $13,025 $10,208 362.4%
Site acquisition service revenues.................. -- 2,123 2,123
Video, voice and data transmission revenues........ -- 2,084 2,084
Other.............................................. 80 276 196 245.0%
------ ------- -------
Total operating revenues........................... 2,897 17,508 14,611 504.3%
------ ------- -------
Tower rental and management expenses............... 1,362 6,080 4,718 346.4%
Site acquisition service expenses.................. -- 1,360 1,360
Video, voice and data transmission expenses........ -- 1,273 1,273
------ ------- -------
Operating expenses excluding depreciation and amor-
tization
and corporate general and administrative expenses.. 1,362 8,713 7,351 539.7%
------ ------- -------
Depreciation and amortization...................... 990 6,326 5,336 539.0%
Corporate general and administrative expenses...... 830 1,536 706 85.1%
Interest expense (income), net..................... (36) 2,804 2,840 N/A
Minority interest in net earnings of subsidiaries.. 185 178 (7) (3.8%)
Income tax benefit (provision)..................... (46) 473 519 N/A
Extraordinary loss................................. -- 694 694
------ ------- -------
Net loss........................................... $ (480) $(2,270) $ 1,790 372.9%
====== ======= =======
Tower cash flow.................................... $1,535 $ 8,795 $ 7,260 473.0%
====== ======= =======
EBITDA............................................. $ 705 $ 7,259 $ 6,554 930.0%
====== ======= =======
</TABLE>

As noted above, ATS consummated numerous acquisitions in 1997 and 1996, many
of which were of a material size. Except as explained below, substantially all
of the increases indicated in the above table were attributable to the impact
of these communications sites and related business acquisitions, principally
those that occurred in 1997. The increase in depreciation and amortization was
primarily attributable to the increase in depreciable and amortizable assets
resulting from the 1996 and 1997 acquisitions and, to a substantially lesser
extent, completed construction projects. The increase in corporate general and
administrative expenses was primarily attributable to the higher personnel
costs associated with supporting ATS's greater number of tower properties and
growth strategy. The increase in interest expense related to higher borrowing
levels which were used to finance 1997 and, to a substantially lesser extent,
the 1996 acquisitions. The minority interest in net earnings of subsidiaries
represents the elimination of the minority stockholder's earnings of
consolidated subsidiaries. The increase is related to increased overall
earnings of ATS Needham, LLC, in which ATS holds a

34
<PAGE>

50.1% interest. The effective tax rate for the year December 31, 1997 was
approximately 23%. The effective tax rate in 1997 is due to the effect of non-
deductible items, principally amortization of goodwill, on certain stock
acquisitions. In 1996, ATS recorded a tax provision of approximately $46,000
despite a loss before taxes of approximately $434,000. This primarily resulted
from non-deductible items, principally amortization of goodwill for which no
tax benefit was recorded. The extraordinary loss in 1997, of approximately
$0.7 million net of tax, represents the write-off of deferred financing fees
associated with ATS's loan agreement.

YEAR ENDED DECEMBER 31, 1996 AND PERIOD ENDED DECEMBER 31, 1995 (DOLLARS IN
THOUSANDS)

As of December 31, 1996, ATS operated approximately 270 communications sites
principally in the Northeast and Mid-Atlantic regions and Florida. As of
December 31, 1995, ATS operated three wireless communications sites in
Florida. See the Notes to Consolidated Financial Statements for a description
of the acquisitions consummated in 1996. These transactions have significantly
affected operations for the year ended December 31, 1996 as compared to the
period from July 17, 1995 (date of incorporation) to December 31, 1995.

<TABLE>
<CAPTION>
AMOUNT OF PERCENTAGE
INCREASE INCREASE
1995 1996 (DECREASE) (DECREASE)
----- ------ ---------- ----------
<S> <C> <C> <C> <C>
Total operating revenues.................. $ 163 $2,897 $2,734 1,677.3%
Operating expenses excluding depreciation
and amortization and corporate general
and administrative expenses.............. 60 1,362 1,302 2,170.0%
Depreciation and amortization............. 57 990 933 1,636.8%
Corporate general and administrative ex-
penses................................... 230 830 600 260.9%
Interest expense (income), net............ -- (36) (36)
Minority interest in net earnings of sub-
sidiary.................................. -- 185 185
Income tax benefit (provision)............ 74 (46) (120) N/A
----- ------ ------
Net loss.................................. $(110) $ (480) $ 370 336.4%
===== ====== ======
Tower cash flow........................... $ 103 $1,535 $1,432 1,390.3%
===== ====== ======
EBITDA.................................... $(127) $ 705 $ 832 N/A
===== ====== ======
</TABLE>

As noted above, ATS consummated several acquisitions in 1996, two of which
were of a material size. Except as explained below, substantially all of the
increases indicated in the above table were attributable to the impact of
these communications sites and related business acquisitions that occurred in
1996. The increase in depreciation and amortization was primarily attributable
to the increase in depreciable and amortizable assets resulting from the 1996
acquisitions. The increase in corporate general and administrative expense was
primarily attributable to the higher personnel costs associated with
supporting ATS's greater number of tower properties. The increase in interest
income was attributable to higher investable cash balances. The minority
interest in net earnings of subsidiary represents the elimination of the
minority stockholder's earnings of consolidated subsidiaries. ATS purchased
its 50.1% interest in ATS Needham, LLC, in July 1996. In 1996, ATS recorded a
tax provision of approximately $46,000 despite a loss before taxes of
approximately $434,000. This primarily resulted from non-deductible items,
principally amortization of goodwill for which no tax benefit was recorded.
The effective tax rate in 1995 was consistent with the statutory rate.

LIQUIDITY AND CAPITAL RESOURCES

ATS's liquidity needs arise from its acquisition-related activities, debt
service, working capital, and capital expenditures. Historically, ATS has met
its operational liquidity needs with internally generated funds and has
financed the acquisition of tower related properties, including related
working capital needs, with a combination of contributions from American Radio
and bank borrowings. For the three months ended March 31, 1998, cash flows
used for operating activities were $1.7 million, as compared to $0.2 million
of cash flows from operating activities in 1997. The change is primarily
attributable to working capital investments related to communications site
acquisitions and growth.

35
<PAGE>

Cash flows used for investing activities were $91.8 million for the three
months ended March 31, 1998 as compared to $3.3 million for the three months
ended March 31, 1997. The increase in 1998 is due to the acquisition and
construction activity in 1998 as compared to 1997.

Cash flows provided by financing activities were $95.8 million for the three
months ended March 31, 1998 as compared to $2.4 million in 1997. The increase
in 1998 is due principally to the impact of borrowings under the Loan
Agreement and proceeds from the sale of common stock pursuant to the ATS Stock
Purchase Agreement.

CBS Merger: As a consequence of the consummation of the CBS Merger, all of
the shares of ATS owned by ARS were or will be distributed to ARS common
stockholders and holders of options to acquire ARS Common Stock or upon
conversion of shares of ARS Convertible Preferred Stock. As a consequence of
the CBS Merger, ATS ceased to be a subsidiary of, or otherwise affiliated
with, American Radio and is currently operating as an independent publicly
traded company. Pursuant to the provisions of the CBS Merger Agreement, ATS
entered into the ARS-ATS Separation Agreement with CBS and ARS providing for,
among other things, the allocation of certain tax liabilities to ATS, certain
closing date adjustments relating to ARS, the lease to ARS by ATS of space on
certain towers previously owned by ARS and transferred to ATS, the orderly
separation of ARS and ATS, and certain indemnification obligations (including
with respect to securities laws matters) of ATS.

ATS's principal obligation is to reimburse CBS on a "make-whole" (after tax)
basis for the tax liabilities in excess of $20.0 million to be incurred by ARS
attributable to the distribution of the Common Stock to the ARS security
holders and certain related transactions. In light of the significant increase
in the trading levels of the Class A Common Stock, ATS and CBS have agreed
that ARS will treat the distribution on its tax return on a more conservative
basis than originally contemplated in order to avoid the possibility of
significant interest and penalties for which ATS would be responsible.
Assuming the "fair market value" of ARS's stock interest in ATS was equal to
$20 11/16 per share, the last reported sale price of such stock in the "when-
issued" market on May 22, 1998, the total estimated tax reimbursement ATS
would be required to make would be between approximately $270.0 and $300.0
million, depending on applicable state tax rates. Such estimate gives effect
to deductions of approximately $88.0 million, based on such closing price,
available to ARS as a consequence of stock option cancellations contemplated
by the CBS Merger. The tax reimbursement would change by between approximately
$20.5 and $22.5 million, again depending on applicable state tax rates, for
each $1.00 change in the "fair market value" of the Common Stock under the tax
reporting position to be followed. The estimates described above are based on
a number of assumptions and interpretations of various applicable income tax
rules and are subject to change.

ARS has agreed that it will pursue, for the benefit and at the cost of ATS,
a refund claim, attributable to the "make whole" provision, estimated at
approximately $74.0 million, based on the assumed "fair market value" set
forth above. Any such refund claim will, in fact, be based on the actual
amount of tax paid. In light of existing tax law, there can, of course, be no
assurance that any such refund claim will be successful. For information with
respect to possible challenges by the Internal Revenue Service (or other
taxing authorities) to ATS's positions with respect to such taxability, see
"Risk Factors--Relationship between ATS and ARS--Certain Contingent
Liabilities."

ARS and CBS have agreed that in computing the amount of taxable gain that is
recognized by ARS in connection with the distribution of the Common Stock, ARS
shall, subject to certain limitations, if so requested by ATS, report the
amount so realized based on the "fair market value" of such stock as
determined based on an appraisal prepared by a mutually agreed upon appraiser.
Any such appraisal is not, of course, binding on the Internal Revenue Service
or other taxing authorities.

36
<PAGE>

approximately $330.0 million. ATS will have potential depreciation and
amortization deductions over the next 15 years of $22.0 million per year and
recorded a deferred tax asset and corresponding liability due to ARS of
approximately $125.0 million to reflect these transactions.

The ARS-ATS Separation Agreement also provides for closing date balance
sheet adjustments based upon the working capital (current assets less defined
liabilities) and specified debt levels of ARS. ATS will benefit from or bear
the cost of such adjustments. ATS's preliminary estimate of such adjustments
is that is will not be required to make a payment of more the $40.0 million
and that, in addition, it will be required to reimburse CBS for the tax
consequences of any such payment which would result in additional liability to
ATS of approximately $26.0 million (assuming a $40.0 million adjustment
payment) under the tax reporting method to be followed and as to which a
refund claim will be filed. Since the amounts of working capital and debt are
dependent upon the uncertainty, among other things, of recent operating
results and cash capital expenditures, as well as CBS merger expenses and the
interpretation and intent of certain provisions of the CBS Merger Agreement as
to which certain issues between ATS and CBS exist. ATS is unable to state
definitively what payments, if any, will be owed by ATS to CBS. See "Risk
Factors--Relationship Between ATS and ARS--Certain Contingent Liabilities" and
"Relationship between ATS and ARS--Closing Date Adjustments".

ATS has entered into the Interim Financing Agreement for the Interim
Financing providing for the issue and sale by ATS of up to $400.0 million of
Interim Preferred Stock in order to finance ATS's obligation to CBS with
respect to tax reimbursement. Pursuant to such agreement, in June 1998, ATS
issued $310.0 million of the Interim Preferred Stock and used the proceeds for
such purpose and to pay the commitment and other fees and other expenses of
the issue and sale of the Interim Preferred Stock. The proceeds of this
Offering will be used principally to redeem the Interim Preferred Stock at a
price equal to 101% of the liquidation preference together with accrued and
unpaid dividends. ATS intends to fund any closing date balance sheet
adjustments and the related tax reimbursements through bank borrowings.

Stock Purchase Agreement: In January 1998, ATS issued 8,000,000 shares of
Common Stock at a purchase price of $10.00 per share, for an aggregate
purchase price of $80.0 million, of which an aggregate of 4,487,500 shares of
Class B Common Stock and 450,000 shares of Class A Common Stock were issued in
exchange for an aggregate of $49.4 million of notes secured by ARS Common
Stock having a market value of not less than 175% of the principal amount and
accrued and unpaid interest on such notes. The notes were paid out of the
proceeds of the CBS Merger. These transactions will increase ATS's ability to
fund acquisitions and meet its liquidity and capital resource needs. See
"Business--Recent Transactions--Stock Purchase Agreement".

Loan Agreement: In October 1997, ATS entered into the Loan Agreement, which
provides ATS with a $250.0 million loan commitment based on ATS maintaining
certain operational ratios and an additional $150.0 million loan at the
discretion of ATS, which is available through June 2005. Following the closing
of the Loan Agreement and repayment of amounts outstanding under the previous
agreement, ATS incurred an extraordinary loss in the fourth quarter of 1997 of
approximately $1.2 million, which was recorded net of the applicable income
tax benefit of $0.7 million, representing the write-off of deferred financing
fees associated with the previous facility. The terms of the Loan Agreement
are discussed in the Notes to Consolidated Financial Statements. As of March
31, 1998, ATS had approximately $157.1 million of total long-term debt, of
which approximately $155.5 million represented borrowings outstanding under
the Loan Agreement. As of such date, assuming consummation of all of the then
or currently pending acquisitions, the CBS Merger and the Interim Financing
(but not the consummation of this Offering), the aggregate amount of long-term
debt would have been approximately $409.4 million and Interim Preferred Stock
with an aggregate liquidation preference of $310.0 million would have been
outstanding. In January 1998, the Loan Agreement was amended to reflect the
transfer of substantially all of the assets and business of ATSI (immediately
prior to consummation of the Gearon Transaction) to ATSLP, as a consequence of
which ATSI and ATSLP are co-borrowers and jointly and severally liable under
the Loan Agreement and various subsidiaries of ATS and ATSI have guaranteed
all of the obligations of ATSI and ATSLP under the Loan Agreement.

37
<PAGE>

On June . 1998, ATS and the Operating Subsidiaries entered into definitive
agreements with respect to the New Credit Facilities. The New Credit
Facilities with ATS provides for a $150.0 million term loan maturing at the
earlier of (i) eight and one-half years or (ii) December 31, 2006, amortizing
quarterly in an amount equal to 2.5% of the principal amount outstanding at
June 30, 2001 at the end of each quarter between such date and June 30, 2006,
both inclusive, and the balance in two equal installments on September 30 and
December 31, 2006. The ATS New Credit Facility was fully drawn at closing and
provides for interest rates determined, at the option of ATS, of either the
LIBOR Rate (as to be defined) plus 3.50% or the Base Rate (as to be defined)
plus 2.5%. The New Credit Facilities with the Operating Subsidiaries provide
for $900.0 million credit facilities maturing at the earlier of (a) eight
years or (b) June 30, 2006 consisting of the following: (i) a $250.0 million
multiple-draw term loan, (ii) a $400.0 million reducing revolving credit
facility and (iii) a $250.0 million 364-day revolving credit facility that
converts to a term loan facility thereafter. The interest rate provisions are
similar to those in the Loan Agreement, except that the range over the Base
Rate is between 0.00% and 1.250% and the range over the LIBOR Rate is between
0.750% and 2.250%. Borrowings under the Operating Subsidiaries' New Credit
Facilities are conditioned upon compliance with certain financial ratios and
are required to be repaid, commencing June 30, 2001, in increasing quarterly
amounts designed to amortize the loans at maturity. The loans to ATS and the
Operating Subsidiaries are cross-guaranteed and cross-collateralized by
substantially all of the assets of the consolidated group. The Operating
Subsidiaries are required to pay quarterly commitment fees equal to 0.375% or
0.250% per annum, depending on their consolidated financial leverage, on the
aggregate unused portion of the aggregate commitment (other than, until taken
down, the 364-day facility on which it is 0.125% until so taken down). Other
provisions of the Operating Subsidiaries' New Credit Facilities are comparable
to the Loan Agreement, although the financial and other covenants are somewhat
more favorable to the Operating Subsidiaries in certain respects, including an
increase of the Total Debt (of the Operating Subsidiaries) to Annualized
Operating Cash Flow ratio from 6.0:1 to 6.5:1 and the inclusion of a Total
Debt (of ATS and the Operating Subsidiaries) to Annualized Operating Cash Flow
ratio of 8.0:1. The New Credit Facility of ATS restricts the payment of cash
dividends and other distributions and the redemption, purchase or other
acquisition

of equity securities. See "Description of Capital Stock--Dividend
Restrictions". In connection with the repayment of borrowings under the Loan
Agreement with Operating Subsidiaries' New Credit Facilities, ATS will
recognize an extraordinary loss of approximately $1.4 million, net of a tax
benefit of $0.9 million, during the second quarter of 1998. See "Indebtedness
of ATS".

During 1997, ATS built or had under construction approximately 80 towers and
had additional capital expenditures of approximately $20.6 million. During
1998, ATS (including ATC and other acquired companies) plans to build or
commence construction of between approximately 400 and 500 towers (most of
which are on a build to suit basis) at an estimated aggregate cost of between
approximately $80.0 to $100.0 million.

A substantial portion of ATS's cash flow from operations is required for
debt service. Accordingly, ATS's leverage could make it vulnerable to a
downturn in the operating performance of its towers or in general economic
conditions. ATS believes that its cash flows from operations will be
sufficient to meet its debt service requirements for interest and scheduled
payments of principal under the proposed loan agreements. If such cash flows
were not sufficient to meet such debt service requirements, ATS might be
required to sell equity securities, refinance its obligations or dispose of
communications sites or other businesses in order to make such scheduled
payments. There can be no assurance that ATS would be able to effect any of
such transactions on favorable terms.

ATS historically has had sufficient cash from its operations to meet its
working capital needs, including normal capital expenditures, but excluding
financing of acquisitions and construction, and believes that it has
sufficient financial resources available to it, including borrowings under the
New Credit Facilities, to finance operations for the foreseeable future.

ATS intends to finance its obligations under pending acquisitions out of the
proceeds of borrowings under the New Credit Facilities. ATS estimates such
obligations aggregate approximately $145.5 million, including the repayment of
approximately $125.0 million of debt in connection with the ATC Merger.

38
<PAGE>

Management believes that, upon consummation of this Offering, it will have
sufficient funds available to it in order to finance current construction
plans and pending acquisitions, to redeem the Interim Preferred Stock and to
fund any closing date balance sheet adjustments obligations under the ARS-ATS
Separation Agreement. However, should additional construction or acquisition
opportunities become available, ATS may require additional financing during
1998. Any such financing could take the form of an increase in the maximum
borrowing levels under the New Credit Facilities (which would be dependent on
the ability to meet certain leverage ratios), the issue of debt or senior
equity securities (which could have the effect of increasing its consolidated
leverage ratios) or equity securities (which, in the case of Common Stock or
securities convertible into or exercisable for Common Stock, would have a
dilutive effect on the proportionate ownership of ATS by its then existing
common stockholders). There can be no assurance that any such financing would
be available on favorable terms.

Management expects that the consummated acquisitions, including the ATC
Merger, and current and future construction activities will have a material
impact on liquidity. As indicated in the Unaudited Pro Forma Condensed
Consolidated Balance Sheet for the three months ended March 31, 1998 and the
foregoing discussion, there is a substantial difference in the historical
liquidity and pro forma liquidity of ATS. Management believes that the
acquisition activities once integrated will have a favorable impact on
liquidity and will offset the initial effects of the funding requirements.
Management also believes that the construction activities may initially have
an adverse effect on the future liquidity of ATS as newly constructed towers
will initially decrease overall liquidity, although as such sites become more
fully operational and achieve higher utilization, they should generate cash
flow and, in the longer term, increase liquidity.

See "Business--Recent Transactions" and the Notes to Consolidated Financial
Statements with respect to acquisition and construction commitments.

YEAR 2000

ATS is aware of the issues associated with the Year 2000 as it relates to
information systems. The Year 2000 is not expected to have a material impact
on ATS's current information systems because its software is either already
Year 2000 compliant or required changes are not expected to be material. Based
on the nature of ATS's business, ATS anticipates it is not likely to
experience material business interruption due to the impact of Year 2000
compliance on its customers and vendors. As a result, ATS does not anticipate
the incremental expenditures to address Year 2000 compliance will be material
to ATS's liquidity, financial position or results of operations over the next
few years.

INFLATION

The impact of inflation on ATS's operations has not been significant to
date. However, there can be no assurance that a high rate of inflation in the
future will not have material adverse effect on ATS's operating results.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (FAS) No. 130, "Reporting Comprehensive
Income," which became effective for the Company for periods beginning after
December 15, 1997. FAS No. 130 establishes standards for reporting and
displaying comprehensive income and its components (revenues, expenses, gains,
and losses) in a full set of general purpose financial statements. FAS No. 130
requires that a company (a) classify items of other comprehensive income by
their nature in a financial statement and (b) display the accumulated balance
of other comprehensive income separately from retained earnings and additional
paid-in-capital in the equity section of the balance sheet. Reclassification
of financial statements for earlier periods provided for comparative purposes
is required. The Company has adopted this statement in the first quarter of
1998. Comprehensive income does not differ from net income.

39
<PAGE>

In June 1997, the FASB released FAS No. 131 "Disclosures about Segments of
an Enterprise and Related Information" (FAS 131). FAS 131 established
standards for reporting information about the operating segments in its annual
report and interim reports. ATS will adopt this standard for its full year
1998 financial information.

In February 1998, the FASB released FAS No. 132, "Employer's Disclosures
about Pensions and Other Postretirement Benefits" (FAS 132), which ATS will be
required to adopt in 1998. FAS 132 will require additional disclosure
concerning changes in ATS's pension obligations and assets and eliminates
certain other disclosures no longer considered useful. Adoption of this
standard will have no effect on reported consolidated results of operations or
financial position.

40
<PAGE>

INDUSTRY OVERVIEW

Communications site owners and operators have benefited in recent years from
a substantial increase in demand for wireless communications services. The
Cellular Telecommunications Industry Association estimates that the number of
subscribers to wireless telephone services was approximately five million in
1990. According to The Strategis Group, a telecommunications marketing
research firm, the number of subscribers to cellular and PCS is over 50
million today and is projected to increase to over 100 million by the year
2001. This demand has prompted the issuance of new wireless communication
licenses and construction of new wireless networks. ATS believes that the
increase in demand for wireless communications is attributable to a number of
factors, including the increasing mobility of the U.S. population and the
growing awareness of the benefits of mobile communications, technological
advances in communications equipment, decreasing costs of wireless services,
favorable changes in telecommunications regulations, and business and consumer
preferences for higher quality voice and data transmission. Consequently, more
towers will be required to accommodate the anticipated increase in the demand
for higher frequency technologies (such as PCS and ESMR) which have a reduced
cell range and thus require a denser network of towers. The Personal
Communications Industry Association (of which James S. Eisenstein, an
executive officer of ATS, is a director) estimates that over 100,000
additional antennae sites will have to be built to accommodate the needs of
cellular and PCS over the next ten years.

ATS believes that as the wireless communications industry has grown it has
become more competitive. As a consequence, many carriers may seek to preserve
capital and speed access to their markets by focusing on activities that
contribute directly to subscriber growth, by outsourcing infrastructure
requirements such as owning, constructing and maintaining towers or by co-
locating transmission facilities. Previously, carriers typically sourced many
of such services in-house, while local non-integrated service contractors
focused on specific segments such as radio frequency engineering, site
acquisition and tower construction. To meet these carrier needs, independent
operators have expanded into a number of associated network and communications
site services, such as the selection and acquisition of communications sites
(including the resolution of zoning and permitting issues), the design of
wireless and broadcast sites and networks, and the construction or supervision
of construction of towers. Also, in order to accelerate network deployment or
expansion and to generate efficiencies, carriers are increasingly co-locating
transmission infrastructure with that of other network operators. The need for
co-location has also been driven by regulatory restrictions and the growing
interest of local municipalities in slowing the proliferation of towers in
their communities by requiring that towers accommodate multiple tenants.

While the wireless communications industry is experiencing rapid growth, the
television broadcasting industry, with strong encouragement from both Congress
and the FCC, is actively planning its strategy for the transition from analog
to digital technology. This change will be required by a construction
timetable imposed on television broadcast licensees by the FCC. The FCC
construction timetable, although subject to revision, currently requires a
number of television stations to commence digital service as soon as May 1,
1999, and some stations have promised to begin such service earlier. ATS
believes that this transition will require a substantial investment in
enhanced broadcast infrastructure, including the construction or reengineering
of broadcast towers. While ATS expects much of the associated capital
requirements will be borne by the broadcasters, management believes that a
significant opportunity exists to invest profitably in the creation of tower
capacity designed to accommodate digital antennas for television broadcasters.
Management believes that, as with the deployment of towers for the wireless
carriers, speed to market and limited capital resources will cause certain
broadcasters to outsource the construction or reengineering of their towers in
order to accommodate digital technology.

A communications tower's location, height and the loaded capacity at certain
wind speeds determine its desirability to wireless carriers and the number of
antennae that the tower can support. An antenna's height on a tower and such
tower's location determine the line-of-sight of such antenna with the horizon
and, consequently, the distance a signal can be transmitted. Some users, such
as paging companies and SMR providers in rural areas, need higher elevations
for broader coverage. Other carriers such as PCS, ESMR and cellular companies
in metropolitan areas usually do not need to place their equipment at the
highest tower point to maximize transmission distance and quality.

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A tower can be either self-supporting or supported by guy wires. There are
two types of self-supporting towers: the lattice and the monopole. A lattice
tower is usually tapered from the bottom up and can have three or four legs. A
monopole is a tubular structure that is typically used as a single purpose
tower or in places where there are space constraints or a need to address
aesthetic concerns. Self-supporting towers typically range in height from 50-
200 feet for monopoles and up to 1,000 feet for lattices, while guyed towers
can reach 2,000 feet or more. A typical communications site consists of a
compound enclosing the tower or towers and an equipment shelter (which houses
a variety of transmitting, receiving and switching equipment).

Rooftop or other building top sites are more common in urban downtown areas
where tall buildings are generally available and multiple communications sites
are required due to high traffic density. One advantage of a rooftop site is
that zoning regulations typically permit installation of antennae. In cases of
such population density, neither height nor extended radius of coverage is as
important. Moreover, the installation of a free-standing tower structure in
urban areas will often prove to be impossible due to zoning restrictions, land
cost and land availability.

The cost of construction of a tower varies both by site location (which will
determine, among other things, the required height of the tower) and type of
tower. Non-broadcast towers (whether on a rooftop or the ground) generally
cost between approximately $150,000 and $200,000, while broadcasting towers
(which generally are built to bear a greater load) generally cost between
approximately $300,000 and $1.0 million if on an elevated location and between
approximately $1.0 million and $3.5 million if on flat terrain. While the
number of tenants that a tower can accommodate will vary depending on the
nature of the services provided by such tenants and the height of the tower,
non-broadcast towers of 200-300 feet that are designed to maximize capacity
generally are capable of housing between five and ten tenants using an
aggregate of between 25 and 50 antennae and broadcasting towers generally are
capable of housing between ten and forty tenants using an aggregate of between
50 and 100 antennae. Annual rental payments vary considerably depending upon
(i) the type of service being provided; (ii) the size of the transmission line
and the number and weight of the antennae on the tower; (iii) the existing
capacity of the tower; (iv) the antenna's placement on, and the location and
height of, the tower; and (v) the competitive environment.

LOGO

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Lease terms vary depending upon the industry user, with television and radio
broadcasters tending to prefer longer term leases (15 to 20 years) than
wireless communications service providers (five to ten years). In either case,
most of such leases contain provisions for multiple renewals at the option of
the tenant. Governmental agencies, because of budgetary restrictions,
generally have one-year leases that tend to renew automatically. Leases tend
to be renewed because of the complications associated with moving antennae. In
the case of a television or radio broadcaster, such a move might necessitate
FCC approval and could entail major dislocations and the uncertainty
associated with building antennae in new coverage areas. In the case of
cellular, PCS and other wireless users, moving one antenna might necessitate
moving several others because of the interlocking grid-like nature of such
systems. In addition, the increasing difficulty of obtaining local zoning
approvals, the environmental activism of community groups and the restrictions
imposed upon owners and operators by the FAA and upon tenants by the FCC tend
to reduce the number of alternatives available to a tower user. Leases
generally provide for annual automatic price increases (escalator provisions)
based on specified estimated cost measures or on increases in the consumer
price index. Owners and operators generally also receive fees for installing
customers' equipment and antennae on the communications site.

Wireless communications towers are owned by a wide range of companies,
including wireless communications providers, regional Bell operating
companies, long distance companies, television and radio broadcasting
companies, independent tower operators, utilities and railroads. Despite the
increasing demand for communications sites, the industry remains highly
fragmented, with few independent operators owning a large number of towers.
ATS estimates that no one independent tower owner and operator (one which owns
and operates communications sites principally for other entities) owns more
than 2% of the towers in the United States. The pace of consolidation has
begun to accelerate, however, as the larger independent operators continue to
acquire small local or regional operators and purchase communications sites
and related assets from wireless communications carriers. Management believes
that a major factor contributing to such consolidation is the emergence of
many major companies seeking to provide increasingly sophisticated wireless
services on a national basis. This, in turn, creates a need for substantial
companies capable of developing and constructing networks of communications
sites and maintaining and servicing the sophisticated support facilities
associated with ongoing operations. ATS believes that the national and other
large wireless service providers will prefer to deal with a company that can
meet the majority of such providers' needs within a particular market or
region, rather than, as in the past, a large number of individual tower
owners, construction companies and other service providers. See "Risk
Factors".

Unlike the fragmented nature of the communications site business, customers
in all segments of the wireless communications industry and the broadcast
industry tend to be large, well capitalized national companies.

As a consequence of the foregoing factors, as well as the lack of
seasonality of the industry, the communications site industry is characterized
by a predictable and recurring stream of income.

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BUSINESS

GENERAL

ATS is a leading independent owner and operator of wireless communications
towers in the United States. As a consequence of its current industry position
and experience, ATS believes it is favorably positioned to capitalize on the
growth opportunities inherent in a rapidly expanding and highly fragmented
communications site industry. Since its organization in 1995, ATS has grown,
predominantly through acquisitions, to a company operating more than 1,800
towers in 44 states and the District of Columbia. Although it intends to
pursue strategic acquisitions, ATS plans to focus on tower construction and to
build or commence construction of between approximately 400 and 500 towers in
1998, at an estimated aggregate cost of between approximately $80.0 and $100.0
million. For the year ended December 31, 1997, giving effect to the ATS Pro
Forma Transactions, ATS had net revenues and EBITDA of $94.9 million and $40.2
million, respectively. For the three months ended March 31, 1998, giving
effect to the ATS Pro Forma Transactions, ATS had net revenues and EBITDA of
$25.1 million and $9.7 million, respectively.

ATS's primary business is the leasing of antennae sites on multi-tenant
towers for a diverse range of wireless communications industries, including
PCS, cellular, ESMR, SMR, paging and fixed microwave, as well as radio and
television broadcasters. ATS also offers its customers a broad range of
network development services, including network design, site acquisition,
zoning and other regulatory approvals, tower construction and antennae
installation. ATS intends to expand these services and to capitalize on its
relationships with its wireless customers through construction for them of
major tower networks that ATS will own and operate. ATS is also engaged in the
video, voice and data transmission business, which it currently conducts in
the New York City to Washington, D.C. corridor and Texas.

ATS is geographically diversified with significant networks of
communications towers throughout the United States. Its largest networks are
in California, Florida and Texas, and it owns and operates or is constructing
tower networks in numerous cities, including Albuquerque, Atlanta, Austin,
Baltimore, Boston, Dallas, Houston, Jacksonville, Kansas City, Los Angeles,
Miami-Ft. Lauderdale, Minneapolis, Nashville, New York, Philadelphia,
Sacramento, San Antonio, San Diego, San Francisco, Tucson, Washington, D.C.
and West Palm Beach.

ATS has a diversified base of approximately 2,500 customers, no one of which
accounted for more than 10% of its 1997 net pro forma revenues from site
leasing activities and the five largest of which accounted for less than 30%
of such net revenues. ATS's wide range of customers includes most of the major
wireless service providers in that industry, including Airtouch, Alltell, AT&T
Wireless Services, Bell Atlantic Mobile, BellSouth, GTE Mobilnet, Houston
Cellular, Metrocall, Mobile Comm, Nextel, Omnipoint, PacBell, PageNet,
PowerTel, PrimeCo PCS, SkyTel, Southwestern Bell, Sprint PCS and Western
Wireless. In addition, most of the major companies in the radio and television
broadcasting industry are ATS's customers, including ABC, CBS, Chancellor
Media, Clear Channel, CNN, Fox, Jacor and NBC. ATS's site acquisition services
are provided to most of such wireless service providers, and ATS has
constructed or is constructing towers on a build to suit basis for companies
such as Nextel, Omnipoint and Southwestern Bell. The principal users of ATS's
video, voice and data transmission services are television broadcasters and
other video suppliers such as CBS, CNN, FOX and HBO.

Management estimates that its site leasing activities, which it believes
generate the highest profit margin of its businesses, account for
approximately 56% of its ongoing pro forma net revenues; site acquisition
activities (including construction for others) account for 24%; and the video,
voice and data transmission business accounts for 20%. However, in light of
management's intention to focus on construction activities, which will
increase the number of antennae sites available for leasing, ATS believes that
leasing activities are likely to grow at a more rapid rate than other aspects
of its business.

ATS derives its revenue from various industry segments. The percentage of
ATS's pro forma net revenues derived from the various industry segments
(including from its site acquisition activities) is estimated to be
approximately as follows: PCS--23%; paging--13%; ESMR--12%; cellular--9%; two-
way radio--5%; SMR

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- --3%; radio and television broadcasting--3%; microwave--3%; governmental and
others--3%; and private industrial users--1%. The remaining approximately 25%
of such revenues are derived from its video, voice and data transmission
customers which are primarily the major television networks, CNN and HBO.
Management believes that the foregoing percentages are not necessarily
indicative of future contributions likely to be made by the various aspects of
its business or of the several different types of wireless providers,
particularly in light of the anticipated growth of PCS, cellular and ESMR
compared to other wireless providers and management's intended focus on build
to suit and other tower construction activities.

ATS's growth strategy is designed to enhance its position as a leading U.S.
provider of communications sites and network development services to the
wireless communications and broadcasting industries. The principal elements of
this strategy are: (i) to maximize utilization of antennae sites through
targeted sales and marketing techniques; (ii) to expand its tower construction
activities, principally through build to suit projects; and (iii) to pursue
strategic acquisitions, designed principally to facilitate entry into new
geographic markets and to complement the construction program.

ATS believes that as the wireless communications industry has grown it has
become more competitive. As a consequence, many carriers may seek to preserve
capital and speed access to their markets by focusing on activities that
contribute directly to subscriber growth and by outsourcing infrastructure
requirements such as owning, constructing and maintaining towers. ATS also
believes that many carriers are, for similar reasons, increasingly co-locating
transmission facilities with those of others, a trend likely to be accelerated
because of regulatory restrictions and the growing tendency of local
municipalities to require that towers accommodate multiple tenants. Management
also believes that national and other large wireless service providers will
prefer to deal with a company, such as ATS, that can meet the majority of such
providers' needs within a particular market or region, rather than, as in the
past, with a large number of individual tower owners, construction companies
and other service providers. See "Risk Factors".

Management believes that, in addition to such favorable growth and
outsourcing trends, the communications site industry and ATS will benefit from
several favorable characteristics, including the following: (i) a recurring
and growing revenue stream based to a significant extent on long-term leases;
(ii) low tenant "churn" due to the costs and disruption associated with
reconfiguring a wireless network or broadcasting location; (iii) a customer
base which is diversified by industry, among customers within each industry
and geographical area, and which consists principally of large, financially
responsible national companies; (iv) favorable absolute and incremental tower
cash flow margins due to low variable operating costs; (v) low on-going
maintenance capital requirements; (vi) local government and environmental
initiatives to reduce the numbers of towers thereby requiring carriers to co-
locate antennae; and (vii) opportunity to consolidate in a highly fragmented
industry, thereby creating the potential for enhanced levels of customer
service and operating efficiency.

GROWTH STRATEGY

ATS's objective is to enhance its position as a leading U.S. provider of
communications sites and network development services to the wireless
communications and broadcasting industries. ATS's growth strategy consists of
the following principal elements:

Internal Growth through Sales, Service and Capacity
Utilization. Management believes that a substantial opportunity for
profitable growth exists by maximizing the utilization of existing and
future towers. Because the costs of operating a site are largely fixed,
increasing tower utilization significantly improves site operating margins.
Moreover, when a specific tower reaches full antennae attachment capacity,
ATS is often able to construct an additional tower at the same location,
thereby further leveraging its investment in land, related equipment and
certain operating costs, such as taxes, utilities and telephone service.

ATS intends to use targeted sales and marketing techniques to increase
utilization of both existing and newly constructed towers and to maximize
investment returns on acquired towers with underutilized capacity.
Management believes that the key to the success of this strategy lies in
its ability to develop and consistently deliver a high level of customer
service, and to be widely recognized as a company that makes

45
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realistic commitments and then delivers on them. Since speed to market and
reliable network performance are critical components to the success of
wireless service providers, ATS's ability to assist its customers in
meeting these criteria will ultimately define its marketing success and
capacity utilization. ATS targets wireless providers that are expanding or
improving their existing network infrastructure as well as those deploying
new technologies.

Growth by Construction. ATS believes that attractive investment returns
can be achieved by constructing new tower networks in and around markets in
which it already has a presence, along major highways, and in targeted new
markets, particularly markets that have not been significantly built out by
carriers or other communications site companies. By working with one or
more "anchor" tenants, ATS will seek to develop an overall master plan for
a particular network by locating new sites in areas identified by its
customers as optimal for their network expansion requirements. ATS
generally secures commitments for leasing prior to commencing construction,
thereby minimizing, to some extent, the risks associated with the
investment. See "Risk Factors--Construction of New Towers". In certain
cases, ATS may identify and secure all zoning and other regulatory permits
for a site in anticipation of customer demand, with actual construction
being delayed until an anchor tenant is secured on reasonable terms.
Strategic acquisitions will also be pursued as a means of filling out or,
in certain cases, initiating, a tower network.

Because of the relatively attractive initial returns which can be
achieved from new tower construction, and because ATS can design and build
towers to specifications that assure ample future capacity and minimize the
need for future capital expenditures, management intends to place a strong
emphasis on new tower development for the foreseeable future. Management
also intends to pursue new tower construction to service the demand for
digital television and for tower space for radio antennae displaced by
digital television requirements. Over time, management believes that more
than half of its towers will result from new construction, with the vast
majority of these designed to serve the wireless communications industry.

During 1997, ATS (including ATC and other acquired companies) constructed
or had under construction approximately 240 towers, including those
constructed for and owned by third parties. During 1998, ATS (including ATC
and other acquired companies) plans to construct or have under construction
between approximately 400 and 500 towers (most of which are on a build to
suit basis) at an estimated aggregate cost of between approximately $80.0
and $100.0 million. In addition, ATS is seeking other major build to suit
projects, although there can be no assurance that any definitive agreements
will result.

The ability to obtain, and commit to, large new construction projects
will require significant financial resources. Management believes that its
cost of capital, relative to the cost of capital of its competitors, will
be an important factor in determining the success of its growth by
construction strategy. Based on its previous capital market transactions,
management believes that it has a good reputation in the financial
community, including among banks, investment banking firms, institutional
investors and public investors, and that such reputation will help it
attract capital on the favorable terms necessary to finance its growth.
However, there can be no assurance that funds will be available to ATS on
such terms.

Growth by Acquisition. ATS intends to continue to target strategic
acquisitions in markets or regions where it already owns towers as well as
new markets, possibly including non-U.S. markets. ATS has achieved a
leading industry position primarily through acquisitions. ATS will attempt
to increase revenues and operating margins at acquired communications sites
through expanded sales and marketing efforts, improved customer service,
the elimination of redundant overhead and, in certain instances, increasing
tower capacity. Acquisitions are evaluated using numerous criteria,
including potential demand, tower location, tower height, existing capacity
utilization, local competition, and local government restrictions on new
tower development. ATS also intends to pursue, on a selective basis, the
acquisition of site acquisition companies and providers of video, voice and
data transmission services. ATS may also pursue acquisitions related to the
communications site industry, including companies engaged in the tower
fabrication business.

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While to date the majority of ATS's growth has resulted from acquisition
activities, management expects to shift ATS's emphasis more towards build
to suit and new tower construction, where it believes investment returns
are more attractive. It will, however, continue to evaluate numerous
acquisition prospects, and expects to consummate selected acquisitions when
the economics or fit are sufficiently attractive.

PRODUCTS AND SERVICES

. LEASING OF ANTENNAE SITES. ATS's primary business is the leasing of
antennae sites on multi-tenanted communications towers to companies in all
segments of the wireless communications and broadcasting industries. Giving
effect to pending acquisitions, ATS will have more than 1,800 towers in 44
states and the District of Columbia, approximately 490 of which are managed
for others, including approximately 280 rooftop antennae.

ATS rents tower space and provides related services for a diverse range of
wireless communications industries, including PCS, cellular, ESMR, SMR,
paging, fixed microwave, as well as radio and television broadcasters. ATS is
geographically diversified with significant tower networks throughout the
United States with its largest networks in California, Florida and Texas, and
owns and operates communications sites or is constructing tower networks in
cities such as Albuquerque, Atlanta, Austin, Baltimore, Boston, Dallas,
Houston, Jacksonville, Kansas City, Los Angeles, Miami-Ft. Lauderdale,
Minneapolis, Nashville, New York, Philadelphia, Sacramento, San Antonio, San
Diego, San Francisco, Tucson, Washington, D.C. and West Palm Beach.

ATS's leases, like most of those in the industry, generally vary depending
upon the industry user, with television and radio broadcasters preferring long
term leases (generally from 15 to 20 years), and wireless communications
providers favoring somewhat shorter lease terms (generally from five to ten
years), with multiple renewals at the option of the tenant. However, ATC's
leases tend to be of shorter duration, generally two years, and permit earlier
termination if ATC attempts to impose price increases relating to escalator
provisions. Leases tend to be renewed due to the costs and disruption
associated with reconfiguring a wireless network or broadcast location.

Most of ATS's leases have escalator provisions (annual automatic increases
based on specified estimated cost measures or on increases in the consumer
price index) that permit ATS to keep pace with inflation. While these
provisions are not by themselves intended to be a primary source of growth,
they provide a stable and predictable growth component that is then enhanced
by increased tower utilization.

The number of antennae which ATS's towers can accommodate varies depending
on the type of tower (broadcast or non-broadcast), the height of the tower,
and the nature of the services provided by such antennae, although
broadcasting towers generally are capable of holding more and larger antennae
and serving more tenants than non-broadcasting towers. Annual rental payments
vary considerably depending upon (i) the type of service being provided; (ii)
the size of the transmission line and the number and weight of the antennae on
the tower; (iii) the existing capacity of the tower; (iv) the antenna's
placement on, and the location and height of, the tower; and (v) the
competitive environment. Management believes that it is not possible to state
with any degree of precision the vacancy or unused capacity of a "typical"
tower, group of related towers or all of its towers for a variety of reasons,
including, among others, the variations that occur depending on the types of
antennae placed on the tower, the types of service being provided by the tower
users, the type and location of the tower or towers, the ability to build
other towers so as to configure a network of related towers, whether any of
the users have imposed restrictions on competitive users, and whether there
are any environmental, zoning or other restrictions on the number or type of
users.

Build to Suit Business. Historically, cellular and other wireless service
providers have constructed a majority of their towers for their own use, while
usually outsourcing certain services such as site acquisition and construction
management. More recently, however, service providers have expressed a growing
interest in having independent companies own the towers on which they will
secure space under long-term leases. Management

<PAGE>

believes this trend is the result of a need among such providers to preserve
capital and to speed access to their markets by focusing on activities that
contribute to subscriber growth and by outsourcing infrastructure requirements
such as owning, constructing and maintaining towers or by co-locating their
transmission infrastructure. ATS has positioned itself as an attractive choice
for this build to suit opportunity. It has done so by acquiring and developing
reputable site acquisition companies with established client relationships in
both site acquisition and construction management, and by securing the
financial resources necessary to participate in the build to suit arena on a
substantial scale. Management believes companies that are able to demonstrate
the ability to successfully locate, acquire and permit sites and finance and
construct towers in a timely manner will be used by a significant number of
wireless service providers on an expanded basis. ATS is currently engaged in
build to suit efforts for a range of clients including Nextel, Omnipoint,
Prime and Southwestern Bell and is seeking other major build to suit projects,
although there can be no assurance that any definitive agreements will result.

In most cases, well engineered and well located towers built to serve the
specifications of an initial anchor tenant in the wireless communications
sector will attract three or more additional wireless tenants over time,
thereby increasing revenue and enhancing margins. ATS has had only limited
experience, to date, with build to suit projects and those that it has
completed and that are operational have been on a much smaller scale than
those that it is negotiating or will seek in the future. Management believes
that ATS's favorable results (occupancy and financial) achieved on completed
projects are not representative of the results likely to be achieved from the
larger projects ATS is currently contemplating and, therefore, has not
included information with respect to the typical vacancy rates or financial
results that can be expected to be generated by such build to suit projects.
See "Risk Factors--Construction of New Towers" for a description of certain
risks involved in tower construction, particularly those involving large build
to suit projects.

Communications Site Management Business. ATS is a leading manager of
communications sites, principally rooftop sites but also ground towers, for
other owners. A principal aspect of this business is the development of new
sources of revenue for building owners by effectively managing all aspects of
rooftop telecommunications, including two-way radio systems, microwave, fiber
optics, wireless cable and paging, and rooftop infrastructure construction
services. ATS manages approximately 490 sites (of which approximately 280 are
rooftops) in 35 states. Management contracts are generally for a period of
five years and contain automatic five-year renewal periods unless terminated
by either party on notice prior to such renewal term or upon an uncured
default. Pursuant to these contracts, ATS is responsible for marketing
antennae sites on the tower, reviewing existing and negotiating future license
agreements with tenant users, managing and enforcing those agreements,
supervising installation of equipment by tenants to ensure, among other
things, non-interference with other users, supervising repairs and maintenance
to the towers, as well as site billing, collections and contract
administration. In addition, ATS handles all calls as well as questions
regarding the site so that the building management team or owner is relieved
of this responsibility. For such services, ATS is entitled to a percentage of
lease payments, which is higher for new tenants than for existing tenants.
Upon any termination of a contract, unless because of its default, ATS is
entitled to its percentage with respect to then existing tenants so long as
they remain tenants.

. SITE ACQUISITION BUSINESS. ATS's site acquisition division has developed
more than 8,000 sites in 48 states and currently has field offices in 13 major
cities including Atlanta, Chicago, Charlotte, Cleveland, Jacksonville, New
Orleans and Seattle. The site selection and acquisition process begins with
the network design. Highway corridors, population centers and topographical
features are identified within the carrier's existing or proposed network, and
drive tests are performed to monitor all PCS, cellular and ESMR frequencies to
locate the systems then operating in that geographic area and identify where
any holes in coverage may exist. Based on this data, the carrier and ATS
develop a "search ring", generally of one-mile radius, within which the site
acquisition department identifies land available either for purchase or lease.
ATS personnel select the most suitable sites, based on demographics, traffic
patterns and signal characteristics. The site is then submitted to the local
zoning/planning board for approval. If the site is approved, in certain
instances ATS will supervise construction of the towers and other improvements
on the communications site. ATS's site acquisition services

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are provided on a fixed fee or time and materials basis. Existing users of
ATS's site acquisition business include Airtouch, Alltel, AT&T Wireless
Services, Ameritech, Bell Atlantic Mobile, BellSouth, GTE Mobilnet,
MobileComm, PageNet, Power Tel, SkyTel, Southwestern Bell, Sprint PCS and
Western Wireless. While ATS will continue to provide site acquisition services
to those customers desiring them, it also intends to actively market its
construction and leasing services as an extension of these services.

. VOICE, VIDEO AND DATA TRANSMISSION BUSINESS. ATS's voice, video and data
transmission business is operated in the New York City to Washington, D.C.
corridor and in Texas. A teleport is the technical link for all video, voice
and data transmission to and from ground based, terrestrial sources and
satellites. A typical teleport facility consists of 20-40 satellite dishes
(antennae), a 24-hour, 365-day operations center, microwave and fiber optics
links, and generators and other support facilities. ATS owns a teleport
outside of New York City and one outside of Washington, D.C., and distributes
video, voice and data over the New York to Washington D.C. corridor through a
fiber and microwave network, including 13 towers. The New York teleport system
is located on a 70-acre owned site which is zoned for 29 microwave dishes of
which 22 are existing, thereby providing significant expansion capacity. The
Washington teleport system is located in northern Virginia, inside of the
Washington Beltway, on ten acres and houses 40 antennae with the capacity for
an additional ten antennae. The network includes both fiber and microwave
channels, is used by all of the major television broadcast networks, and
accesses all domestic and major international satellites in the operating
region. The system is able to distribute voice, video and data through
satellite or terrestrial distribution. The Texas system consists of a teleport
outside of Dallas that enables it to distribute video, voice and data from
Dallas to Corpus Christi through a fiber and microwave network including 35
towers. This system includes 15 microwave dishes and covers the most populated
area of Texas, servicing Austin, Corpus Christi, Dallas, Houston and San
Antonio. The system connects to all major sports and convention venues, video
companies and broadcast networks in those cities. The principal users of ATS's
video, voice and data transmission services are television broadcasters and
other video suppliers such as CBS, CNN, Fox and HBO.

CUSTOMERS

ATS's customers aggregate approximately 2,500 and include many of the major
companies in the wireless communications industry. While none of ATS's
customers accounted for as much as 10% of its 1997 pro forma net revenues from
site leasing activities, most of the customers named below account for more
than 1% of such revenues, and each is considered by ATS to be an important
customer:

(i) Cellular and PCS: Airtouch, Alltell, AT&T Wireless, Bell Atlantic
Mobile, BellSouth, GTE Mobilnet, Houston Cellular, Mobile Comm, Omnipoint,
PacBell, Prime Co, PCS, Southwestern Bell Mobile Systems (operating as
Cellular One), and Sprint PCS;

(ii) Paging: Arch, Metrocall, PageMart, PageNet and Pittencrief;

(iii) ESMR: Nextel;

(iv) Television and Radio Broadcasting: ABC, CBS, Chancellor Media, Clear
Channel, CNN, Fox, Jacor Communications and NBC.

ATS's site acquisition activities, which afford ATS the opportunity to
furnish additional services such as the construction and leasing of
communications sites, are provided to most of the cellular, PCS and ESMR
customers listed above. ATS has constructed or is constructing towers on a
build to suit basis for companies such as Nextel, Omnipoint and Southwestern
Bell and is seeking other major build to suit projects, although there can be
no assurance that any definitive agreements will result.

The principal users of ATS's video, voice and data transmission services are
television broadcasters and other video suppliers such as CBS, CNN, Fox and
HBO. Revenues are derived from two sources of approximately equal
significance: (i) contracted, long-term services of a regular, recurring
nature and (ii) nonrecurring services relating to special news or events.
Monthly transmissions average approximately 3,500 at ATS's teleports.

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MANAGEMENT ORGANIZATION

ATS is headquartered in Boston and is organized on a regional basis with
each region being headed by a vice president who reports to the Chief
Operating Officer. Its current regional operations are based in Boston,
Atlanta, Houston and the San Francisco Bay area, although additional regional
centers may develop over time. Management believes that its regional
operations centers which are in varying stages of development should
ultimately be capable of responding effectively to the opportunities and
customer needs of their respective defined geographic areas and that these
operations centers should have skilled engineering, construction management
and marketing personnel. Management also believes that over time enhanced
customer service and greater operating efficiencies can be achieved by
centralizing certain operating functions, including accounting and lease
administration. Such centralization, when achieved, will enable key
information about each site, tower lease and customer to become part of a
centralized database, with communications links to regional operations
centers.

In conjunction with its acquisition of various companies, management
believes it has obtained the services of key personnel with skills in areas
such as engineering, site acquisition, construction management, tower
operations, marketing, lease administration, and finance. As ATS seeks to
expand its size and improve on the quality and consistency of service
delivery, it believes it needs to complete the staffing of its existing
regions and may, in the longer term, need to supplement its current workforce
in certain critical areas, develop new regional centers and intensify its
dedication to customer service. Accordingly, management is actively recruiting
key personnel to complete the staffing of its regional operations centers and
to strengthen and deepen its corporate group. ATS focuses its efforts on
recruiting people from the industry sectors it serves and in some instances
recruiting skilled engineering, marketing and other personnel from outside the
communications site, wireless communications and broadcasting industries.

HISTORY

In early 1995, Steven B. Dodge, Chairman of the Board, President and Chief
Executive Officer of American Radio, and other members of American Radio's
management, recognized the opportunity in the communications site industry as
a consequence of ARS's ownership and operation of broadcast towers. ATS was
formed in July 1995 to capitalize on this opportunity. During 1996, ATS's
acquisition program was modest, entailing the acquisition of companies owning
an aggregate of 15 communications sites and managing approximately 250 sites
for others, for an aggregate purchase price of approximately $21.0 million.
During that year, however, ATS entered into several more significant
acquisition agreements that were consummated in 1997.

RECENT TRANSACTIONS

Of the following Recent Transactions, only the Meridian Transaction, the
Diablo Transaction, the MicroNet Transaction, the Tucson Transaction, the
Gearon Transaction, the OPM Transaction, the ATC Merger and the Transfer of
Towers from ARS to ATS are included in the ATS Pro Forma Transactions.

Consummated Acquisitions. Since January 1, 1997, exclusive of the ATC
Merger, ATS has consummated more than 15 acquisitions (including those agreed
to in 1996) involving more than 550 sites (including sites on which towers are
to be constructed) and its site acquisition and voice, video and data
transmission businesses.

In May 1997, ATS consummated, among others, three acquisitions as follows:
(i) the purchase of two related companies engaged in the site acquisition
business for unaffiliated third parties in various locations in the United
States for approximately $13.0 million; (ii) the purchase of a tower site
management business, in Georgia, North Carolina and South Carolina for
approximately $5.4 million of 21 tower sites, and (iii) the purchase of a 70%
interest in a business that will initially own and operate communications
towers that are to be constructed on 58 sites in northern California; the
remaining 30% of the joint venture (ATS/PCS) is owned by an unaffiliated
party. ATS paid the other party approximately $0.8 million in cash for its 70%
interest and is obligated to provide equity financing for the construction of
those towers (estimated at approximately $5.3 million) as well as any others
that the joint venture may construct. See "--Pending Acquisitions".

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In July 1997, ATS consummated four unrelated acquisitions, including the
purchase for approximately $33.5 million of 56 sites and a tower site
management business in southern California (the "Meridian Transaction").

In October 1997, ATS consummated two unrelated acquisitions as follows: (i)
110 sites and a site management business primarily in northern California for
approximately $45.0 million (the "Diablo Transaction"); and (ii) 128 owned or
leased tower sites, principally in the Mid-Atlantic region, with the remainder
in California and Texas, and the video, voice and data transmission business
for approximately $70.25 million (the "MicroNet Transaction").

In January 1998, ATS consummated the acquisition of OPM-USA-INC. ("OPM"), a
company which owned approximately 90 towers at the time of acquisition (the
"OPM Transaction"). In addition, OPM is in the process of developing an
additional approximately 160 towers that are expected to be constructed during
the next 12 to 18 months. The purchase price, which is variable and based on
the number of towers completed and the forward cash flow of the completed OPM
towers, could aggregate up to $105.0 million, of which approximately $21.3
million was paid at the closing. ATS has also agreed to provide the financing
to OPM to enable it to construct the 160 towers in an aggregate amount not to
exceed $37.0 million (less advances as of consummation aggregating
approximately $5.7 million).

In January 1998, ATS consummated the Gearon Transaction pursuant to which
ATSI merged with a company engaged primarily in the site acquisition business
for unaffiliated third parties that also owned or had under construction 40
tower sites. The merger price of approximately $80.0 million was paid by
delivery of 5,333,333 shares of Class A Common Stock, the payment of
approximately $32.0 million in cash and assumed liabilities.

In January 1998, as part of the CBS Merger, ARS transferred to ATS 14 of the
16 communications sites currently used by American Radio and various third
parties and ARS and ATS entered into leases or subleases of space on the
towers transferred. The remaining two communications sites will be transferred
and leases entered into following the acquisition by ARS of the sites from
third parties. See "Relationship between ATS and ARS--Lease Arrangements".

In January 1998, ATS consummated the purchase of a communications site with
six towers in Tucson, Arizona (the "Tucson Transaction") for approximately
$12.3 million.

In February 1998, ATS acquired 11 communications tower sites in northern
California for approximately $11.8 million.

In May 1998, ATS acquired the assets relating to a teleport serving the
Washington, D.C. area for a purchase price of approximately $30.5 million. The
facility is located in northern Virginia, inside of the Washington Beltway, on
ten acres.

In June 1998, ATS acquired a broadcasting tower (the "Intracoastal
Transaction") in the Boston area for 720,000 shares of Class A Common Stock.
As part of such acquisition, ATS issued non-recourse notes in the aggregate
principal amount of $12.0 million that are payable solely out of payments made
on a $12.0 million principal amount note received as part of the acquisition.

ATC Merger. On June . , 1998, ATS consummated the ATC Merger Agreement
pursuant to which ATC merged with and into ATS which is the surviving
corporation. Pursuant to the ATC Merger, ATS issued an aggregate of
approximately 30.1 million shares of Class A Common Stock (including shares
issuable upon exercise of options to acquire ATC Common Stock which, to the
extent they were outstanding as of the effectiveness of the ATC Merger, became
options to acquire Class A Common Stock). The 30.1 million shares of Class A
Common Stock represented 35% of the aggregate number of shares of Common Stock
which were outstanding immediately after consummation of the ATC Merger on a
pro forma basis, assuming the exercise of all ATS and ATC stock options
outstanding immediately prior to the ATC Merger, but before giving effect to
the acquisitions described in the preceding paragraph under "--Consummated
Acquisitions" above and under "--Pending Acquisitions" below.

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<PAGE>

As a condition to consummation of the ATC Merger, Messrs. Dodge and Stoner
entered into a voting agreement with ATC and certain of the ATC common
stockholders, pursuant to which Messrs. Dodge and Stoner agreed to vote in
favor of the election of each of Messrs. Lummis and Mays (or any other nominee
of Mr. Lummis and Clear Channel reasonably acceptable to the ATS Board of
Directors) so long as Mr. Lummis and Clear Channel (or their respective
affiliates) hold at least 50% of the shares of Class A Common Stock to be
received by him or it in the ATC Merger.

Chase Capital, which is an affiliate of Chase Equity Associates, a
stockholder of ATS, and Mr. Chavkin, a director of ATS, owned approximately
18.1% of the ATC Common Stock as of April 6, 1998 and had a representative on
the ATC Board of Directors. See "Principal and Selling Stockholders." Summit
Capital of Houston ("Summit Capital") received a $2.25 million broker's fee
from ATC upon consummation of the ATC Merger. Fred Lummis, the former
President and Chief Executive Officer of ATC, and a director of ATS, is an
affiliate of Summit Capital.

The provisions of the ATC Merger Agreement are comparable to those customary
in similar transactions, including without limitation (a) detailed,
substantially identical representations and warranties of ATS and ATC which
did not survive consummation of the ATC Merger; (b) covenants as to the
interim conduct of the business of ATS and ATC; (c) agreements of ATS to (i)
indemnify the officers and directors of ATC and to maintain officer and
director insurance for their benefit, (ii) maintain employment benefits for a
period of one year for officers and employees of ATC, both on terms and
conditions comparable to those presently in effect, and (iii) continue the
employment of ATC employees at existing salary levels for a period of one
year; and (d) closing conditions, including (i) the receipt of opinions of
counsel that the ATC Merger qualifies as a tax-free "reorganization" for
federal income tax purposes, (ii) the election of Messrs. Lummis and Mays as
directors of ATS; and (iii) the amendment of the ATS Restated Certificate as
described under "Description of Capital Stock--Common Stock--ATC Merger
Amendments". The ATC Merger Agreement provided, among other conditions of
consummation, that there shall not have been any event which shall have had a
Material Adverse Effect (as defined in the ATC Merger Agreement) on ATS or
ATC.

ATC was a leading independent owner and operator of wireless communications
towers and operated approximately 850 towers in 32 states, including
approximately 125 towers managed for a third party owner and had agreed to
acquire approximately 60 additional towers in 1998 at an aggregate estimated
cost of approximately $28.0 million. For the year ended December 31, 1997, ATC
had net revenues and EBITDA of $20.0 million and $12.7 million, respectively.
For the three months ended March 31, 1998, ATC had net revenues and EBITDA of
$6.3 million and $4.1 million, respectively.

ATC rented tower space and provided related services to wireless
communications service providers, as well as operators of private networks and
government agencies, for a diverse range of applications including cellular,
PCS, ESMR, SMR, paging and fixed microwave. ATC owned and operated towers in
45 of the largest 100 metropolitan statistical areas in the United States and
has clusters of towers in cities such as Albuquerque, Atlanta, Baltimore,
Dallas, Houston, Jacksonville, Kansas City, Nashville, San Antonio and San
Diego. ATC had a diversified base of approximately 865 customers, no one of
which accounted for more than 10% of its net revenues for the year ended
December 31, 1997. ATS's wide range of customers included most of the major
wireless service providers such as Bell South Mobility, GTE Mobilnet, Houston
Cellular, Nextel, PageMart, PageNet, Pittencrief Communications, SBC
Communications, Sprint PCS, and various government agencies.

ATC was organized in October 1994 by an investor group led by Summit Capital
Inc. and Chase Capital to acquire Bowen-Smith Corp. ("Bowen-Smith"). Bowen-
Smith had been in the tower rental business since 1966, initially serving the
communications tower requirements of two-way radio and microwave transmission
users. At the time of the acquisition (the "Bowen-Smith Acquisition"), Bowen-
Smith owned 184 towers on 175 sites located primarily in Texas, Louisiana and
Oklahoma. Within the first year after the Bowen-Smith Acquisition, ATC
acquired or constructed more than 75 towers. In December 1995, ATC acquired
103 towers from CSX

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Realty Development Corporation, and in October 1996, ATC acquired 154 towers
from Prime Communication Sites Holding, L.L.C. In June 1997, ATC completed a
private placement of common stock with Clear Channel representing
approximately 30.03% of ATC (before giving effect to stock options) and
resulting in net proceeds to ATC of $23.0 million. During 1997, ATC acquired
or agreed to acquire approximately 200 towers and constructed or had under
construction at year end approximately 65 towers.

Pending Acquisitions. ATS is negotiating certain changes in the ATS/PCS
arrangements, including the acquisition by ATS of the 58 communications sites
in northern California presently owned by ATS/PCS in exchange for shares of
Class A Common Stock, arrangements with respect to the development of
communications sites in other locations, a priority return of ATS's
construction advances, an increase in the percentage interest of the other
member in ATS/PCS, and a management fee to ATS.

ATS is also negotiating an agreement to acquire a company which is in the
process of constructing approximately 40 towers in the Tampa, Florida area, of
which seven are presently operational. The purchase price will be equal to an
excess of (i) ten times the "Current Run Rate Cash Flow" at the time of
closing, over (ii) the principal amount of the secured note referred to below.
The purchase price will be payable in shares of Class A Common Stock (valued
at market prices shortly prior to closing) and, at the election of the seller,
cash in an amount not to exceed 49% of the purchase price. "Current Run Rate
Cash Flow" means twelve (12) times the excess of net revenues over direct
operating expenses for the month preceding closing. ATS is obligated to
advance construction funds to the seller in an aggregate amount not to exceed
$12.0 million in the form of a secured note (guaranteed by the stockholders on
a nonrecourse basis and secured by the stock of the seller), of which
approximately $2.1 million has been advanced to date. The secured note would
be payable in the event a definitive acquisition agreement is not executed or
if the acquisition were not consummated. Subject to the negotiation and
execution of a definitive agreement and to the satisfaction of certain
conditions, including, depending on the circumstances, the expiration or
earlier termination of the HSR Act waiting period, the acquisition is expected
to be consummated in the spring of 1999.

Other Transactions. ATS is negotiating and intends to pursue the acquisition
of other communications sites and management and related businesses on a
selective basis, although there are no definitive binding agreements with
respect to any material transaction except as referred to above.

Stock Purchase Agreement. In January 1998, ATS consummated the transactions
contemplated by the Stock Purchase Agreement, dated as of January 8, 1998,
with certain officers and directors of ARS and ATS (or their affiliates or
members of their family or family trusts), pursuant to which those persons
purchased shares of Common Stock at $10.00 per share, as follows: Mr. Dodge:
4,000,000 (Class B); Mr. Box: 450,000 (Class A); Mr. Buckley: 300,000 (Class
A); each of Messrs. Eisenstein and Steven J. Moskowitz: 25,000 (Class A); Mr.
Kellar: 400,000 (Class A); Mr. Stoner, his wife and certain family trusts:
649,950 (Class B); other Stoner family and trust purchasers: 150,050 (Class
A); and Chase Equity Associates: 2,000,000 (Class C). Messrs. Buckley and
Kellar are directors of ARS, and Mr. Chavkin, a director of ARS and ATS, is an
affiliate of Chase Equity Associates. Mr. Moskowitz was recently recruited to
serve as a Vice President of ATS and the General Manager of the Northeast
Region.

Payment of the purchase price was in the form of cash in the case of Chase
Equity Associates, all members of Mr. Stoner's family and the family trusts
(but not Mr. Stoner and his wife) and Messrs. Buckley, Eisenstein, Kellar and
Moskowitz, and, in the case of Messrs. Dodge, Box and Stoner (and his wife),
in the form of a note that was paid in full upon consummation of the CBS
Merger. The notes bore interest at the six-month London Interbank Offered
Rate, from time to time, plus 1.5% per annum, and were secured by shares of
ARS Common Stock having a fair market value of not less than 175% of the
principal amount of and accrued and unpaid interest on the note. The notes
were prepayable at any time at the option of the obligor and were due and
payable, at the option of ATS, in the event of certain defaults set forth
therein.

The ARS Board appointed a special committee (the "Special Committee")
consisting of three directors (who were not directors of ATS and who were not
a party to the Stock Purchase Agreement) to determine the

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fairness to ARS from a financial point of view of the terms and conditions of
the Stock Purchase Agreement. None of the members of the Special Committee was
a party to the Stock Purchase Agreement. No limitations were imposed on the
activities of the Special Committee by the ARS Board. The Special Committee
retained Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch")
to act as its exclusive financial advisor in connection with the transactions
contemplated by the Stock Purchase Agreement. No limitations were placed on
the activities of Merrill Lynch. Merrill Lynch delivered its written opinion,
dated January 8, 1998, to the Special Committee that, as of such date and
based upon and subject to the matters set forth therein, the purchase price of
$10.00 per share to be received by ATS pursuant to the Stock Purchase
Agreement was fair from a financial point of view to ARS. Based upon such
opinion, and its own evaluation of the terms and conditions of the Stock
Purchase Agreement, the Special Committee approved the Stock Purchase
Agreement as fair to and in the best interests of ARS.

Pursuant to an Engagement Letter, dated November 20, 1997, ARS agreed to pay
Merrill Lynch a fee of $500,000 in consideration for its services. ARS has
also agreed to reimburse Merrill Lynch for its expenses, including reasonable
fees and expenses of its counsel, and to indemnify Merrill Lynch for
liabilities and expenses arising out of its engagement and the transactions in
connection therewith, including liabilities under the federal securities laws.
ATS is obligated under the ATS-ARS Separation Agreement to reimburse ARS for
all such fees and expenses which ARS has incurred to Merrill Lynch and to
assume such indemnification obligation.

Amended Credit Facilities. In order to facilitate future growth and, in
particular, to finance its construction program in June 1998, ATS and the
Operating Subsidiaries entered into the New Credit Facilities with its senior
lenders, pursuant to which the existing maximum borrowing of the Operating
Subsidiaries would be increased from $400.0 million to $900.0 million, subject
to compliance with certain financial ratios, and ATS (the parent company)
borrowed an additional $150.0 million. See "Indebtedness of ATS".

SALES AND MARKETING

ATS's sales and marketing personnel target wireless carriers expanding their
network capabilities as well as carriers entering new markets. ATS attempts to
minimize hurdles to purchasing decisions by offering master license agreements
which correspond to the internal requirements of wireless operators. ATS also
offers standardized system pricing in areas in which it operates tower
networks enabling potential customers to obtain pricing information for an
entire service area rather than on a tower-by-tower basis. ATS believes
customer satisfaction is the key to successful marketing and that referrals
from its current customers are and will continue to be a primary source of new
customers.

REGULATORY MATTERS

Federal Regulations. Both the FCC and the FAA regulate towers used for
wireless communications and radio and television antennae. Such regulations
control the siting, lighting, marking and maintenance of towers and may,
depending on the characteristics of the tower, require registration of tower
facilities and issuance of determinations of no hazard. Wireless
communications devices operating on towers are separately regulated and
independently licensed by the FCC based upon the regulation of the particular
frequency used. In addition, the FCC also separately licenses and regulates
television and radio stations broadcasting from towers. Depending on the
height and location, proposals to construct new antenna structures or to
modify existing antenna structures are reviewed by the FAA to ensure that the
structure will not present a hazard to aircraft, and such review is a
prerequisite to FCC authorization of communication devices placed on the
tower. Tower owners also may bear the responsibility for notifying the FAA of
any tower lighting failures. ATS generally indemnifies its customers against
any failure to comply with applicable standards. Failure to comply with
applicable requirements may lead to civil penalties.

The introduction and development of digital television also may affect ATS
and some of its largest customers. In addition, the need to install additional
antennae required to deliver DTV service may necessitate the relocation of
many currently co-located FM antennae. The need to secure state and local
regulatory approvals

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for the construction and reconstruction of this substantial number of antennae
and the structures on which they are mounted presents a potentially
significant regulatory obstacle to the communications site industry. As a
result, the FCC has solicited comments on whether, and in what circumstances,
the FCC should preempt state and local zoning and land use laws and ordinances
regulating the placement and construction of communications sites. There can
be no assurance as to whether or when any such federal preemptive regulations
may be promulgated or, if adopted, what form they might take, whether they
would be more or less restrictive than existing state and local regulations,
or whether the constitutionality of such regulation, if challenged on
constitutional grounds, would be upheld.

Local Regulations. Local regulations include city and other local
ordinances, zoning restrictions and restrictive covenants imposed by local
authorities. These regulations vary greatly, but typically require tower
owners to obtain approval from local officials or community standards
organizations prior to tower construction. Local regulations can delay or
prevent new tower construction or site upgrade projects, thereby limiting
ATS's ability to respond to customer demand. In addition, such regulations
increase costs associated with new tower construction. There can be no
assurance that existing regulatory policies will not adversely affect the
timing or cost of new tower construction or that additional regulations will
not be adopted which increase such delays or result in additional costs to
ATS. Such factors could have a material adverse effect on ATS's financial
condition or results of operations.

ENVIRONMENTAL MATTERS

Under various federal, state and local environmental laws, ordinances and
regulations, an owner of real estate or a lessee conducting operations thereon
may become liable for the costs of investigation, removal or remediation of
soil and groundwater contaminated by certain hazardous substances or wastes.
Certain of such laws impose cleanup responsibility and liability without
regard to whether the owner or operator of the real estate or operations
thereon knew of or was responsible for the contamination, and whether or not
operations at the property have been discontinued or title to the property has
been transferred. The owner or operator of contaminated real estate also may
be subject to common law claims by third parties based on damages and costs
resulting from off-site migration of the contamination. In connection with its
former and current ownership or operation of its properties, ATS may be
potentially liable for environmental costs such as those discussed above.

ATS believes it is in compliance in all material respects with all
applicable material environmental laws. ATS has not received any written
notice from any governmental authority or third party asserting, and is not
otherwise aware of, any material environmental non-compliance, liability or
claim relating to hazardous substances or wastes or material environmental
laws. However, no assurance can be given (i) that there are no undetected
environmental conditions for which ATS might be liable in the future or (ii)
that future regulatory action, as well as compliance with future environmental
laws, will not require ATS to incur costs that could have a material adverse
effect on ATS's financial condition and results of operations.

COMPETITION

ATS competes for antennae site customers with wireless carriers that own and
operate their own tower networks and lease tower space to other carriers, site
development companies that acquire space on existing towers for wireless
providers and manage new tower construction, other national independent tower
companies and traditional local independent tower operators. Wireless service
providers that own and operate their own tower networks generally are
substantially larger and have greater financial resources than ATS. ATS
believes that tower location and capacity, price, quality of service and
density within a geographic market historically have been and will continue to
be the most significant competitive factors affecting owners, operators and
managers of communications sites.

ATS competes for acquisition and new tower construction sites with wireless
service providers, site developers and other independent tower operating
companies, as well as financial institutions. ATS believes that competition
for acquisitions and tower construction sites will increase and that
additional competitors will enter the tower market, certain of which may have
greater financial resources than ATS.

<PAGE>

ATS also faces strong competition for build to suit opportunities,
principally from other independent communications sites operators and site
developers, certain of which have more extensive experience and offer a
broader range of services (principally in constructing for themselves rather
than managing the construction of others) than ATS can presently offer.

PROPERTIES

ATS's interests in its communications sites are comprised of a variety of
fee interests, leasehold interests created by long-term lease agreements,
private easements, and easements, licenses or rights-of-way granted by
government entities. In rural areas, a communications site typically consists
of a three to five acre tract which supports towers, equipment shelters and
guy wires to stabilize the structure. Less than 2,500 square feet are required
for a self-supporting tower structure of the kind typically used in
metropolitan areas. Land leases generally have twenty (20) to twenty-five (25)
year terms, with three five-year renewals, or are for five-year terms with
automatic renewals unless ATS otherwise specifies. Some land leases provide
"trade-out" arrangements whereby ATS allows the landlord to use tower space in
lieu of paying all or part of the land rent. ATS has more than 1,000 land
leases. Pursuant to the Loan Agreement, the senior lenders have liens on
substantially all of the fee interests, leasehold interests and other assets
of the Operating Subsidiary which owns, directly or, in certain cases, through
subsidiaries all of the assets of the consolidated group.

LEGAL PROCEEDINGS

ATS is occasionally involved in legal proceedings that arise in the ordinary
course of business. While the outcome of these proceedings cannot be predicted
with certainty, management does not expect any pending matters to have a
material adverse effect on ATS's financial condition or results of operations.

EMPLOYEES

As of June ., 1998, ATS employed approximately 450 full time individuals and
considers its employee relations to be satisfactory.

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MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth certain information concerning the executive
officers and directors of ATS:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Steven B. Dodge(1)...... 52 Chairman of the Board, President and Chief Executive Officer
Alan L. Box............. 46 Executive Vice President and Director
Douglas Wiest........... 45 Chief Operating Officer
Arnold L.
Chavkin(1)(2)(3)....... 46 Director
James S. Eisenstein..... 40 Executive Vice President--Corporate Development
J. Michael Gearon, Jr... 33 Executive Vice President and Director
Fred R. Lummis.......... 44 Director
Randall Mays............ 32 Director
Thomas H. Ston-
er(1)(2)(3)............ 63 Director
Joseph L. Winn.......... 46 Treasurer and Chief Financial Officer
</TABLE>
- --------
(1) Member of the Executive Committee; Mr. Stoner is the Chairman of the
Executive Committee.
(2) Member of the Audit Committee; Mr. Chavkin is the Chairman of the Audit
Committee.
(3) Member of the Compensation Committee; Mr. Stoner is the Chairman of the
Compensation Committee.

The ATS Board will be expanded to include one or two additional independent
directors. Although management has had discussions with certain persons
concerning their willingness to serve as independent directors, no decisions
or commitments have been made with respect to filling those positions. The two
independent directors will be elected annually, commencing in 1999, by the
holders of Class A Common Stock, voting as a separate class. All directors
hold office until the annual meeting of the stockholders of ATS next following
their election or until their successors are elected and qualified. Each
executive officer is appointed annually and serves at the discretion of the
ATS Board.

As a condition to the consummation of the ATC Merger, two nominees of ATC,
Fred R. Lummis, Chairman of the Board, President and Chief Executive Officer
of ATC, and Randall Mays, the Chief Financial Officer and Executive Vice
President of Clear Channel, one of the principal stockholders of ATC, were
elected as directors of ATS, and Mr. Winn resigned as a director of ATS. See
"Business--Recent Transactions--ATC Merger" for information with respect to
voting agreement relating to the election of nominees of Mr. Lummis and Clear
Channel.

Steven B. Dodge is the Chairman, President and Chief Executive Officer of
ATS. Mr. Dodge is also the Chairman of the Board, President and Chief
Executive Officer of ARS, a position he occupied since its founding on
November 1, 1993 until consummation of the CBS Merger. Dodge was the founder
in 1988 of Atlantic Radio, L.P. ("Atlantic") which was one of the predecessor
entities of American Radio. Prior to forming Atlantic, Mr. Dodge served as
Chairman and Chief Executive Officer of American Cablesystems Corporation
("American Cablesystems"), a cable television company he founded in 1978 and
operated as a privately-held company until 1986 when it completed a public
offering in which its stock was priced at $14.50 per share. American
Cablesystems was merged into Continental Cablevision, Inc. in 1988 in a
transaction valued at more than $750.0 million, or $46.50 per share. The
initial public offering of ARS Class A Common Stock occurred in June 1995 at a
price of $16.50 per share. Upon consummation of the CBS Merger, each share of
ARS Class A Common Stock was exchanged into $44.00 and one share of Class A
Common Stock. Mr. Dodge also serves as a director of American Media, Inc. and
the National Association of Broadcasters (the "NAB").

Alan L. Box is an Executive Vice President and a director of ATS. Mr. Box
served as Chief Operating Officer of ATS from June 1997 to March 1998 at which
time he assumed his present role as the Executive Vice President responsible
for the video, voice and data transmission business of ATS. Mr. Box also was
an Executive Vice President and a director of ARS from April, 1997 when EZ
Communications, Inc. ("EZ") merged into

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ARS (the "EZ Merger") until consummation of the CBS Merger. Prior to the EZ
Merger, Mr. Box was employed by EZ, starting in 1974 as the General Manager of
EZ's Washington, D.C. area radio station. He became Executive Vice President
and General Manager and a director of EZ in 1979, President of EZ in 1985 and
Chief Executive Officer of EZ in 1995. He serves as a director of George Mason
Bankshares, Inc. and George Mason Bank.

Arnold L. Chavkin is the Chairman of the Audit Committee of the Board of
ATS. Mr. Chavkin was the Chairman of the Audit Committee of the Board of
American Radio since its founding until consummation of the CBS Merger. Mr.
Chavkin is a general partner of Chase Capital Partners ("CCP"), previously
known as Chemical Venture Partners ("CVP"), which is a general partner of
Chase Equity Associates ("CEA"), a stockholder of ARS and ATC, and previously
a principal stockholder of Multi Market Communications, Inc., one of the
predecessors of American Radio. Mr. Chavkin has been a General Partner of CCP
and CVP since January 1992 and has served as the President of Chemical
Investments, Inc. since March 1991. Chase Capital, which is an affiliate of
Chase Equity Associates, owns approximately 18.1% of ATC; Chase, which is also
an affiliate of Chase Capital is a lender under the Loan Agreement with a
6.75% participation. Mr. Chavkin is also a director of R&B Falcon Drilling
Company, Bell Sports Corporation, Wireless One, Inc. and Patina Oil & Gas
Corporation. Prior to joining Chemical Investments, Inc., Mr. Chavkin was a
specialist in investment and merchant banking at Chemical Bank for six years.
For the information with respect to the interests of an affiliate of Mr.
Chavkin, CCP and CEA in ATC, see "Business--Recent Transactions--ATC Merger".

James S. Eisenstein is the Executive Vice President--Corporate Development
of ATS. Mr. Eisenstein has overall responsibility for seeking out acquisition
and development opportunities for ATS. Mr. Eisenstein helped form ATS in the
summer of 1995. From 1990 to 1995, he was Chief Operating Officer for Amaturo
Group Ltd., a broadcast company operating eleven radio stations and four
broadcasting towers, several of which were purchased by American Radio. In
February 1998, Mr. Eisenstein was elected to serve on the Board of Directors
of the Personal Communications Industry Association, the leading international
trade association representing the wireless communications industry. He has
extensive experience in structuring acquisitions and the operation and
management of broadcasting and tower businesses.

J. Michael Gearon, Jr. was the principal stockholder and Chief Executive
Officer of Gearon & Co., Inc., a position he has held since September 1991. As
a condition to consummation of the Gearon Transaction, Mr. Gearon was elected
a director of ATS and President of Gearon Communications, the division of ATS
which operates its site acquisition business. See "Business--Recent
Transactions".

Fred R. Lummis, a director of ATS, has served as Chairman, Chief Executive
Officer and President of ATC since its organization in October 1994. Mr.
Lummis has been the President of Summit Capital, a private investment firm,
since 1990. Mr. Lummis served as Senior Vice President of Duncan, Cook & Co.,
a private investment firm from 1986 to 1990 and as Vice President of Texas
Commerce Bank Inc. from 1978 to 1986. Mr. Lummis currently serves on the board
of several private companies and is a trustee of the Baylor College of
Medicine.

Randall Mays, a director of ATS, has served as Chief Financial Officer and
Executive Vice President of Clear Channel since February 1997, prior to which
he had served as a Vice President and Treasurer since joining Clear Channel in
1993. Prior to joining Clear Channel, he was an associate at Goldman, Sachs &
Co.

Thomas H. Stoner is the Chairman of the Executive Committee and the
Compensation Committee of the Board of ATS. Mr. Stoner was the Chairman of the
Executive Committee and the Compensation Committee of the Board of American
Radio since its founding until consummation of the CBS Merger. Mr. Stoner
founded Stoner Broadcasting Systems, Inc. ("Stoner") in 1965. Stoner, which
was one of the predecessors of American Radio, operated radio stations for
over 25 years in large, medium and small markets. Mr. Stoner is a director of
Gaylord Container Corporation and a trustee of the Chesapeake Bay Foundation.

58
<PAGE>

Douglas Wiest is the Chief Operating Officer of ATS. Mr. Wiest joined ATS in
February 1998, initially as the Chief Operating Officer of Gearon
Communications, and assumed his current position in March 1998. Prior to
joining ATS, Mr. Wiest was Regional Vice President of Engineering and
Operations for Nextel's southern region. Prior to joining Nextel in 1993, Mr.
Wiest was employed by McCaw Communications where he was engaged in network
systems development for approximately three years and by Pacific Telesis where
he was engaged in strategic planning and operations for approximately eight
years.

Joseph L. Winn is the Chief Financial Officer and Treasurer of ATS. Mr. Winn
was also Treasurer, Chief Financial Officer and a director of ARS since its
founding until consummation of the CBS Merger. In addition to serving as Chief
Financial Officer of American Radio, Mr. Winn was Co-Chief Operating Officer
responsible for Boston operations until May 1994. Mr. Winn served as Chief
Financial Officer and a director of the general partner of Atlantic after its
organization. He also served as Executive Vice President of the general
partner of Atlantic from its organization until June 1992, and as its
President from June 1992 until the organization of ARS. Prior to joining
Atlantic, Mr. Winn served as Senior Vice President and Corporate Controller of
American Cablesystems after joining that company in 1983.

EXECUTIVE COMPENSATION

All of the executive officers of ATS listed below (other than Mr.
Eisenstein) were employees of ARS (or, in the case of Mr. Box, of EZ prior to
the EZ Merger) since the organization of ATS in 1995 until consummation of the
CBS Merger. During that period the highest paid executive officers, other than
Mr. Dodge, who are employees of ATS, were Messrs. Box, Winn and Eisenstein.
The compensation of each of those individuals (other than Mr. Eisenstein) was
principally for acting as an executive officer of American Radio (or, in the
case of Mr. Box, EZ prior to the EZ Merger) and, accordingly, information
provided with respect to their executive compensation represents compensation
paid by ARS (with the exception of Mr. Eisenstein).

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
---------------------------------- ------------------------------
NAME AND OTHER ANNUAL SHARES UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY(3) BONUS COMPENSATION OPTIONS(4) COMPENSATION
------------------ ---- --------- -------- ------------ ----------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Steven B. Dodge(1)(2)... 1995 $252,625 -- -- -- --
Chairman of the Board, 1996 $297,250 50,000 -- 40,000 4,910(5)
President
and Chief Executive 1997 $502,338 -- -- 100,000 1,716(5)
Officer
Joseph L. Winn(1)(2).... 1995 $227,859 -- -- 65,000 --
Treasurer and Chief 1996 $257,250 42,500 -- 20,000 11,456(6)
Financial
Officer 1997 $352,329 40,000 -- 35,000 12,876(6)
Alan L. Box(1)(2)....... 1997 $264,400(7) -- -- 100,000 1,216(8)
Chief Operating Officer
James S. Eisenstein(2).. 1995 $ 62,109 -- -- 40,000(8) 5,260(9)
Executive Vice 1996 $169,250 19,000 -- 200,000(10) 8,669(9)
President--
Corporate Development 1997 $212,367 -- -- 20,000(10) 12,656(9)
</TABLE>
- --------
(1) Represents both annual and long-term compensation paid by ARS.

(2) The Compensation Committee of ATS has approved annual base salaries for
1998 for Mr. Dodge, and each of its other five executive officers, at the
following rates: Mr. Dodge: $250,000; Mr. Box: $50,000; Mr. Eisenstein
$200,000; Mr. Gearon: $200,000; Mr. Wiest: $225,000; and Mr. Winn:
$225,000. Such salaries commenced (in the case of Messrs. Dodge, Winn and
Eisenstein) with the consummation of the CBS Merger, prior to which time
such individuals (other than Mr. Eisenstein) were paid by ARS at their
then present compensation rates.

59
<PAGE>

(3) Includes American Radio's matching 401(k) plan contributions.
(4) Represents options to purchase shares of ARS Common Stock granted
pursuant to the ARS stock option plan, except in the case of Mr.
Eisenstein. See "--Stock Option Information" below.
(5) Includes group term life insurance and parking expenses paid by ARS.
(6) Includes group term life insurance, automobile lease and parking expenses
paid by ARS.
(7) Includes $87,500 paid by ATS commencing October 1, 1997.
(8) Includes group term life insurance paid by ARS.
(9) Includes group term life insurance and automobile expenses paid by ATS.
(10) Represents options to purchase shares of common stock of ATSI granted
pursuant to the ATSI Plan. See "--Stock Option Information" below.

DIRECTOR COMPENSATION

The ATS Board will be expanded to include two independent directors. Such
independent directors will be granted options to purchase 25,000 shares of
common stock, which will be exercisable in 20% cumulative annual increments
commencing one year from the date of grant and will expire at the end of ten
years. The outside directors will also receive fees of $3,000 for each Board
of Directors meeting attended and $1,000 for each committee meeting attended
held apart from a board meeting and will be reimbursed for expenses.

STOCK OPTION INFORMATION

Effective November 5, 1997, ATS instituted the 1997 Stock Option Plan, as
amended and restated (the "Plan"), which is administered by the Compensation
Committee of the ATS Board. The Plan was designed to encourage directors,
consultants and key employees of American Tower Systems and its subsidiaries
to continue their association with ATS by providing opportunities for such
persons to participate in the ownership of ATS and in its future growth
through the granting of stock options, which may be options designed to
qualify as incentive stock options ("ISOs") within the meaning of Section 422
of the Code, or options not intended to qualify for any special tax treatment
under the Code ("NQOs"). The Plan provides that ATS may not grant options to
purchase more than 5,000,000 shares per year per participant.

The duration of the ISOs and NQOs granted under the Plan may be specified by
the Compensation Committee pursuant to each respective option agreement, but
in no event shall any such option be exercisable after the expiration of ten
(10) years after the date of grant. In the case of any employee who owns (or
is considered under Section 424(d) of the Code as owning) stock possessing
more than ten percent of the total combined voting power of all classes of
stock of ATS, no ISO shall be exercisable after the expiration of five
(5) years from the date such option is granted. The option pool under the Plan
consists of an aggregate of 15,000,000 shares of Common Stock, which may
consist of shares of Class A Common Stock, shares of Class B Common Stock or
some combination thereof. As a condition to consummation of the ATC Merger,
the Plan was amended to provide, that all future grants of options under the
Plan must be to purchase shares of Class A Common Stock.

In July 1996, ATSI adopted its 1996 Stock Option Plan (the "ATSI Plan") and,
pursuant thereto, options were granted to various officers of ATSI (the "ATSI
Options"). In connection with the CBS Merger, those options to purchase the
common stock of ATSI will be converted into options to acquire shares of Class
A Common Stock (the "ATS Options"). In addition, each option to purchase
shares of ARS Common Stock (the "ARS Options") held by persons who will be
directors or employees of ATS may be exchanged for ATS Options. The ARS
Options will be exchanged in a manner that will preserve the spread in such
ARS Options between the option exercise price and the fair market value of ARS
Common Stock and the ratio of the spread to the exercise price prior to such
conversion and, to the extent applicable, otherwise in conformity with the
rules under Section 424(a) of the Code and the regulations promulgated
thereunder.

During the year ended December 31, 1997 the only options granted pursuant to
the ATSI Plan to the individuals referred to in "--Executive Compensation"
above were to Mr. Eisenstein.

60
<PAGE>

OPTION GRANTS IN FISCAL YEAR 1997
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
APPRECIATION
FOR OPTION
TERMS(B)
--------------------
NUMBER OF
SHARES OF
UNDERLYING EXERCISE
OPTIONS PRICE EXPIRATION
NAME GRANTED(A) PER SHARE DATE 5% 10%
---- ---------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C>
James S. Eisenstein.... 27,312 $5.49 1/2/07 $ 94,298 $ 238,970
</TABLE>
- --------
(a) Gives effect to the exchange of ATSI Options to purchase 20,000 shares at
$7.50 per share for ATS Options.
(b) The potential realizable value at assumed annual rates of stock price
appreciation for the option term of 5% and 10% would be $94,298 and
$238,970, respectively. A 5% and 10% per year appreciation in stock price
from $5.49 per share yields appreciation of $3.45 per share and $8.75 per
share, respectively. The actual value, if any, Mr. Eisenstein may realize
will depend on the excess of the stock price over the exercise price on
the date the option is exercised, so that there is no assurance the value
realized by an executive will be at or near the amounts reflected in this
table.

The only unexercised options granted pursuant to the ATSI Plan to the
individuals referred to in "--Executive Compensation" above were to Mr.
Eisenstein.

<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT DECEMBER 31, 1997 AT DECEMBER 31, 1997(B)
---------------------------- ----------------------------
NAME EXERCISABLE(A) UNEXERCISABLE EXERCISABLE(A) UNEXERCISABLE
---- -------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
James S. Eisenstein..... 114,709 185,720 $717,260 $1,137,479
</TABLE>
- --------
(a) In 1996 Mr. Eisenstein was granted options pursuant to the ATSI Plan for
an aggregate of 200,000 shares at $5.00 per share. Such options became
exercisable to the extent of 80,000 shares on July 1, 1997 and become
exercisable in 20% cumulative annual increments commencing on July 1,
1998, and expire September 9, 2006. Giving effect to the exchange of ATSI
Options for ATS Options, Mr. Eisenstein will have options to purchase
273,117 shares of Class A Common Stock at $3.66 per share, of which
109,247 shares are presently purchasable. An additional ten-year option to
purchase 20,000 shares of common stock of ATSI at $7.50 per share was
granted to Mr. Eisenstein on January 2, 1997. Giving effect to the
exchange of ATSI Options for ATS Options, this option will convert into an
option to purchase 27,312 of shares of Class A Common Stock at $5.49 per
share, of which 5,462 shares are presently purchasable.
(b) The value of unexercised in-the-money options of Mr. Eisenstein at
December 31, 1997, based on an assumed price of $10.00 per share was
approximately $1,854,739.

In January 1998, the ATS Compensation Committee granted options to purchase
shares of Common Stock to the executive officers of ATS in the amounts shown
(which will be increased by subsequent grants, contingent upon consummation of
the ATC Merger, as shown in parenthesis). All existing options have an
exercise price of $10.00, the price at which shares of Common Stock were sold
pursuant to the Stock Purchase Agreement, are to purchase Class A Common Stock
(Class B Common Stock in the case of Mr. Dodge's option to purchase 1,700,000
shares) and become exercisable in 20% cumulative annual increments commencing
one year from the grant dates): Mr. Dodge--1,700,000 shares (an additional
1,300,000 shares); Mr. Box--120,000 shares (an additional 80,000 shares); Mr.
Eisenstein--28,000 shares (an additional 22,000 shares); and Mr. Winn--275,000
shares (an additional 210,000 shares). Pursuant to options granted as a
condition to consummation of the Gearon Transaction, Messrs. Gearon and Wiest
received options to purchase 234,451 shares and 240,001 shares, respectively,
of Class A Common Stock at $13.00 per share, which also become exercisable in
20% cumulative annual increments.

All employees of ARS who became employees of ATS (which includes, among
others, Messrs. Box, Dodge, Eisenstein and Winn) who held options to purchase
ARS Common Stock (including Mr. Box: 100,000 shares;

61
<PAGE>

Mr. Dodge: 290,000 shares; Mr. Eisenstein: 40,000 shares; and Mr. Winn:
280,000 shares) were given the opportunity to convert their ARS Options into
ATS Options. Such conversion was effectuated upon consummation of the CBS
Merger in a manner designed to preserve the spread in such ARS Options between
the option exercise price and the fair market value of ARS Common Stock and
the ratio of the spread to the exercise price prior to such conversion and, to
the extent applicable, otherwise in conformity with the rules under Section
424(a) of the Code and the regulations promulgated thereunder. Messrs. Box,
Dodge, Eisenstein and Winn exercised their respective rights to exchange ARS
Options for ATS Options such that such individuals hold ATS Options as follows
(based on a $64.00 and $20.00 per share value for the ARS Common Stock and
Common Stock, respectively): Mr. Box: 320,000 shares of Class A Common Stock
at $8.52 per share; Mr. Dodge: an aggregate of 928,000 shares of Class B
Common Stock at prices ranging between $3.09 and $9.71 per share; Mr.
Eisenstein: 128,000 shares of Class B Common Stock at $7.42 per share; and Mr.
Winn: an aggregate of 417,056 shares of Class B Common Stock and 25,824 shares
of Class A Common Stock at prices ranging between $2.00 and $8.80 per share.
The information set forth above does not include such to be exchanged ARS
Options held by Messrs. Dodge, Box, Eisenstein and Winn. See "Principal and
Selling Stockholders".

In addition to options outstanding and to be outstanding under the Plan, ATS
has issued options to purchase an aggregate of approximately 1,750,000 shares
pursuant to the exchange of ARS options and approximately 1,250,000 shares
pursuant to the exchange of ATC options.

CERTAIN TRANSACTIONS

Chase was a lender with a 6.75% participation under the Loan Agreement and
has a 5.2% participation under the New Credit Facilities for the Operating
Subsidiaries. Chase is an affiliate of CVP, the general partner of CEA; Mr.
Chavkin, a director of ATS and ARS, is a general partner of CVP. At December
31, 1997, the aggregate principal amount outstanding under the Loan Agreement
was approximately $88.5 million. Chase's share of interest and fees paid by
ATS pursuant to the provisions of the Loan Agreement was $0.3 million in 1997.
For information with respect to the interests of Chase Capital, an affiliate
of Mr. Chavkin in ATC and the ATC Merger, see "Business--Recent Transactions--
ATC Merger".

For information with respect to the sale of shares of Common Stock to Mr.
Dodge and certain other officers and directors (and their affiliates, family
members and family trusts) of ARS and ATS, see "Business--Recent
Transactions--Stock Purchase Agreement".

For information with respect to the continuing relationship between ATS and
ARS, see "Relationship between ATS and ARS--Sharing of Tax and Other
Consequences" and "--Lease Arrangements".

Management believes that the above transactions (other than the lease
arrangements with ARS which were negotiated with CBS on a below-market basis),
to the extent they were with affiliated parties, were on terms, and ATS
intends to continue its policy that all future transactions between it and its
officers, directors, principal stockholders and affiliates will be on terms,
not less favorable to ATS than those which could be obtained from unaffiliated
parties.

62
<PAGE>

PRINCIPAL AND SELLING STOCKHOLDERS

The following information sets forth certain information known to ATS as of
June . , 1998 (i.e., after consummation of the CBS Merger and the ATC Merger),
with respect to the shares of Common Stock that are beneficially owned as of
such date by (i) each person known by ATS to own more than 5% of the
outstanding Common Stock, (ii) each director of ATS, (iii) each executive
officer of ATS, and (iv) all directors and executive officers of ATS as a
group. The table also sets forth information of a comparable nature giving
effect, in addition to the foregoing, to the consummation of this Offering.
The number of shares beneficially owned by each director or executive officer
is determined according to the rules of the Commission, and the information is
not necessarily indicative of beneficial ownership for any other purpose.
Under such rules, beneficial ownership includes any shares as to which the
individual or entity has sole or shared voting power or investment power and
also any shares which the individual or entity has the right to acquire within
sixty days of June . , 1998 through the exercise of an option, conversion
feature or similar right. The information set forth below with respect to
options gives effect to the exchange of ARS options into ATS options as
permitted by the CBS Merger Agreement, based on assumed relative market values
of the ARS Common Stock and the Common Stock of $64.00 and $20.00 per share,
respectively. The actual exchange of such options will be based on the
relative market prices of such stock immediately prior to consummation of the
CBS Merger. Except as noted below, each holder has sole voting and investment
power with respect to all shares of Common Stock listed as owned by such
person or entity.

<TABLE>
<CAPTION>
SHARES OF COMMON STOCK BENEFICIALLY PRO FORMA
OWNED PRIOR TO THIS OFFERING FOR THIS OFFERING
-------------------------------------------------- -----------------------
PERCENT PERCENT PERCENT OF PERCENT OF SHARES PERCENT OF PERCENT OF
OF OF COMMON TOTAL VOTING BEING COMMON TOTAL VOTING
NUMBER CLASS A CLASS B STOCK POWER OFFERED STOCK POWER
---------- ------- ------- ---------- ------------ --------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
DIRECTORS AND EXECUTIVE
OFFICERS
Steven B. Dodge(1)...... 6,545,114 * 67.48 8.39 40.17 -- 6.69 35.74
Thomas H. Stoner(2)..... 1,587,459 * 17.33 2.05 10.12 -- 1.63 8.98
Alan L. Box(3).......... 914,928 1.40 -- 1.18 * -- * *
James S. Eisenstein(4).. 190,909 * * * * -- * *
J. Michael Gearon,
Jr.(5)................. 4,711,113 7.23 -- 6.07 3.01 -- 4.76 2.63
Fred R. Lummis(6)....... 1,813,866 2.76 -- 2.32 1.1 -- 1.85 1.03
Randall Mays (Clear
Channel)(7)............ 9,028,648 13.86 -- 11.64 5.77 -- 9.26 5.12
Douglas Wiest(8)........ 44,444 * -- * * 8,888 * *
Joseph L. Winn(9)....... 409,952 * 4.29 * 2.54 -- * 2.25
Arnold L. Chavkin
(CEA)(10).............. 9,833,761 10.04 -- 12.68 4.18 -- 10.09 3.71
All executive officers
and directors as a
group
(ten persons)(11)...... 34,935,179 35.45 84.03 44.19 64.55 -- 35.22 57.54
FIVE PERCENT
STOCKHOLDERS
Baron Capital Group,
Inc.(12)............... 6,603,150 10.14 -- 8.51 4.22 -- 6.77 3.74
OTHER SELLING
STOCKHOLDERS
Dan King Brainard....... 555,555 * -- * * 155,000 * *
The Gearon Family
Trust(13).............. 471,111 * -- * * 71,111 * *
Arnold 1994 Limited
Partnership(14)........ 494,691 * -- * * 192,862 * *
Arnold Family Limited
Partnership(15)........ 494,691 * -- * * 192,862 * *
BOCP II, Limited
Liability Company(16).. 1,015,612 1.56 -- 1.31 * 771,448 * *
Max Bowen
Enterprises(17)........ 1,781,081 2.73 -- 2.30 1.14 147,539 1.68 *
Equus Equity
Appreciation Fund,
L.P.(18)............... 1,862,084 2.86 -- 2.40 1.19 732,876 1.33 *
William R. Lummis(19)... 612,337 * -- * * 202,505 * *
Ransom C. Lummis(20).... 127,289 * -- * * 25,457 * *
Isabel Stude
Lummis(21)............. 32,786 * -- * * 6,557 * *
Melham Inc.(22)......... 191,897 * -- * * 191,897 * *
Mayfirst Associates
Ltd.(23)............... 120,538 * -- * * 120,538 * *
Summit Capital
Inc.(24)............... 964,310 * -- * * 289,293 * *
Ann Isabel Stude Trust
I(25).................. 93,538 * -- * * 19,286 * *
George M. Weiss Rollover
Individual Retirement
Account(26)............ 108,002 * -- * * 108,002 * *
Scott R. McQueen(27).... 204,375 * *
Randall T. Odeneal(28).. 179,375 * *
---------
TOTAL SHARES............ 3,619,871
=========
</TABLE>
- -------
* Less than 1%.

(1) Mr. Dodge is Chairman of the Board, President and Chief Executive Officer
of ATS. His address is 116 Huntington Avenue, Boston, Massachusetts
02116. Does not include an aggregate of 524,800 shares of Class B Common
Stock purchasable under ATS Options received in exchange for ARS Options
upon consummation

63
<PAGE>

of the CBS Merger; includes an aggregate of 403,200 shares of Class B
Common Stock as to which such options are exercisable. Includes an
additional 10,030 shares of Class A Common Stock and 6,037,114 shares of
Class B Common Stock owned by Mr. Dodge, an aggregate of 25,050 shares of
Class A Common Stock owned by three trusts for the benefit of Mr. Dodge's
children, 66,720 shares owned by a limited liability company, of which Mr.
Dodge is the sole member and 3,000 shares of Class A Common Stock owned by
Mr. Dodge's wife. Mr. Dodge disclaims beneficial ownership in all shares
owned by such trusts and his wife. Does not include 1,700,000 shares of
Class B Common Stock purchasable under an option granted on January 8,
1998 to Mr. Dodge under the Plan and 170 shares of Class A Common Stock
held by Thomas S. Dodge, an adult child of Mr. Dodge, with respect to
which Mr. Dodge disclaims beneficial ownership.

(2) Mr. Stoner is Chairman of the Executive Committee of the ATS Board. His
address is 116 Huntington Avenue, Boston, Massachusetts 02116. Does not
include 12,800 shares of Class A Common Stock purchasable under an ATS
Option received in exchange for an ARS Option upon consummation of the
CBS Merger and 25,000 shares of Class A Common Stock purchasable under an
option granted on January 8, 1998 to Mr. Stoner under the Plan; includes
3,200 shares of Class A Common Stock as to which such exchanged option is
exercisable. Includes 46,311 shares of Class B Common Stock owned by his
wife, 10,998 shares of Class B Common Stock and 36,000 shares of Class A
Common Stock owned by a charitable foundation, of which Mr. Stoner serves
as an officer and an aggregate of 403,460 shares of Class B Common Stock
and 22,500 shares of Class A Common Stock owned by trusts of which he
and/or certain other persons are trustees. Mr. Stoner disclaims
beneficial ownership of 232,128 shares of Class B Common Stock and 58,500
shares of Class A Common Stock owned by the charitable foundation and
such trusts. Does not include 100,675 shares of Class A Common Stock and
62,454 shares of Class B Common Stock owned by Mr. Stoner's adult
children.

(3) Mr. Box is a director and an Executive Vice President of ATS. His address
is 116 Huntington Avenue, Boston, Massachusetts 02116. Includes 2,070
shares of Class A Common Stock owned by two trusts for the benefit of Mr.
Box's children and 64,000 shares of Class A Common Stock purchasable
under ATS Options received in exchange for ARS Options upon consummation
of the CBS Merger. Does not include 256,000 shares of Class A Common
Stock purchasable under such exchanged ATS Options or 120,000 shares of
Class A Common Stock purchasable under an option granted on January 8,
1998 to Mr. Box under the Plan.

(4) Mr. Eisenstein is Executive Vice President-Corporate Development of ATS.
His address is 116 Huntington Avenue, Boston, Massachusetts 02116. Does
not include 76,800 shares of Class B Common Stock purchasable under ATS
Options received in exchange for ARS Options upon consummation of the CBS
Merger; includes 51,200 shares of Class B Common Stock as to which such
options will be exercisable. Does not include an aggregate of 185,720
shares of Class A Common Stock purchasable under ATSI Options which
became options to purchase Class A Common Stock; includes an aggregate of
114,709 shares of Class A Common Stock as to which such options are
exercisable. Does not include 28,000 shares of Class A Common Stock
purchasable under an option granted on January 8, 1998 to Mr. Eisenstein
under the Plan.

(5) Mr. Gearon is an Executive Vice President and director of ATS. His
address is 116 Huntington Avenue, Boston, Massachusetts 02116. Includes
4,240,002 shares of Class A Common Stock currently owned by Mr. Gearon
and 471,111 shares (71,111 of which are to be offered in this Offering)
of Class A Common Stock held by a trust for the benefit of Mr. Gearon's
children of which J. Michael Gearon, Sr. is the trustee. Mr. Gearon
disclaims beneficial ownership in all shares owned by such trust. Does
not include 234,451 shares of Class A Common Stock purchasable under
options granted on January 22, 1998 to Mr. Gearon under the Plan.

(6) Mr. Lummis was the Chairman, Chief Executive Officer and President of ATC
and is a director of ATS. His address is 3411 Richmond Avenue, Suite 400,
Houston, Texas 77046. Includes 14,464 shares of Class A Common Stock
owned by Mr. Lummis, an aggregate of 256,506 shares of Class A Common
Stock owned by trusts of which he is trustee, 964,310 shares of Class A
Common Stock owned by Summit, an affiliate of Mr. Lummis by reason of Mr.
Lummis's 50% ownership of the common stock of Summit, and 578,586 shares
of Class A Common Stock purchasable under an option originally granted by
ATC which became an option to purchase Class A Common Stock pursuant to
the ATC Merger.

64
<PAGE>

(7) Mr. Mays, the Chief Financial Officer and an Executive Vice President of
Clear Channel, is a director of ATS. His address is P.O. Box 659512, San
Antonio, Texas 78265-9512. Clear Channel owns all of the shares of Class
A Common Stock shown in the table. Mr. Mays disclaims beneficial
ownership of Clear Channel's ownership of such shares.

(8) Mr. Wiest is the Chief Operating Officer of ATS. His address is 116
Huntington Avenue, Boston, Massachusetts 02116. Includes 44,444 shares
(8,888 of which are to be offered in this Offering) of Class A Common
Stock owned by Mr. Wiest. Does not includes 240,001 shares of Class A
Common Stock purchasable under options granted on January 22, 1998 to Mr.
Wiest under the Plan.

(9) Mr. Winn is the Treasurer and Chief Financial Officer of ATS. His address
is 116 Huntington Avenue, Boston, Massachusetts 02116. Includes 2,000
shares of Class A Common Stock and 7,948 shares of Class B Common Stock
owned individually by Mr. Winn and 100 shares of Class A Common Stock
held for the benefit of his children. Does not include an aggregate of
163,917 shares of Class B Common Stock and 20,659 shares of Class A
Common Stock purchasable under ATS Options received in exchange for ARS
Options upon consummation of the CBS Merger; includes an aggregate of
253,139 shares of Class B Common Stock and 5,165 shares of Class A Common
Stock as to which such options are exercisable. Does not include an
aggregate of 275,000 shares of Class A Common Stock purchasable under an
option granted on January 8, 1998 to Mr. Winn under the Plan.

(10) Mr. Chavkin is a director of ATS. His address is 116 Huntington Avenue,
Boston, Massachusetts 02116. Mr. Chavkin, as a general partner of CCP,
which is the general partner of CEA may be deemed to own beneficially
shares held by CEA and Chase Capital, an affiliate of Mr. Chavkin.
Includes 26,911 shares of Class A Common Stock and 3,295,518 shares of
Class C Common Stock owned by CEA, 5,206,313 shares of Class A Common
Stock owned by Chase Capital and 1,301,819 shares of Class A Common Stock
owned by Archery Partners, an affiliate of Chase Capital. Mr. Chavkin
disclaims such beneficial ownership of such shares. The address of CCP
and CEA is 380 Madison Avenue, 12th Floor, New York, New York 10017. Does
not include 12,800 shares of Class A Common Stock purchasable under an
ATS Option received in exchange for an ARS Option upon consummation of
the CBS Merger and 25,000 shares of Class A Common Stock purchasable
under an option granted on January 8, 1998 to Mr. Chavkin under the Plan;
includes 3,200 shares of Class A Common Stock as to which such exchanged
option is exercisable.
(11) Includes all shares stated to be owned in the preceding notes.
(12) The address of Baron Capital Group, Inc. ("Baron") is 767 Fifth Avenue,
New York, New York 10153. Based on Baron's Amendment No. 4 to Schedule
13D dated March 27, 1998, Mr. Baron, the president of Baron, has sole
voting power over 180,000 shares of Class A Common Stock, shared voting
power over 1,910,350 shares of Class A Common Stock, sole dispositive
power over 180,000 shares of Class A Common Stock and shared dispositive
power over 1,910,350 shares of Class A Common Stock. Mr. Baron disclaims
beneficial ownership of 5,879,770 shares of Class A Common Stock.
(13) After such sale, the Gearon Family Trust will have 400,000 shares of
Class A Common Stock. J. Michael Gearon, Sr. is the sole trustee of the
trust. The children of J. Michael Gearon, Jr. are the beneficiaries of
the trust.

(14) The address of Arnold 1994 Limited Partnership is 1001 Fannin, Suite 720,
Houston, Texas 77002.

(15) The address of Arnold Family Limited Partnership is 1001 Fannin, Suite
720, Houston, Texas 77002.

(16) The address of BOCP II, Limited Liability Company is 300 Crescent Court,
Suite 1600, Dallas, Texas 75201.

(17) The address of Max Bowen Enterprises is Allied Tower, 2525 South Shore
Blvd., Suite 420, League City, Texas 77573.

(18) The address of Equus Capital Corporation is 2929 Allen Parkway, Suite
2500, Houston, Texas 77019. Equus Equity Appreciation Fund, L.P. is a
limited partnership, the general partner of which is Equus Capital
Corporation.

(19) The address of William R. Lummis is 4525 Texas Commerce Tower, 600
Travis, Houston, Texas 77002. Mr. Lummis is the father of Fred Lummis, a
director of ATS.

(20) The address of Ransom C. Lummis is 910 Travis, Houston, Texas 77002. Mr.
Lummis is the brother of Fred Lummis, a director of ATS.

(21) The address of Isabel Stude Lummis is 910 Travis, Houston, Texas 77002.
Ms. Lummis is the sister-in-law of Fred Lummis, a director of ATS.

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(22) The address of Melham Inc. is 5 Post Oak Park, Suite 2560, Houston, Texas
77027.

(23) The address of Mayfirst Associates Ltd. is 5 Post Oak Park, Suite 2560,
Houston, Texas 77027.

(24) The address of Summit Capital Inc. is 8 Greenway Plaza, Suite 714,
Houston, Texas 77046. Fred Lummis, a director of ATS, serves as the
President of Summit Capital.

(25) The address of the trustee for the Ann Isabel Stude Trust I is 1600
Smith, Suite 5100, Houston, Texas 77002.

(26) The address of the custodian for the George M. Weiss Rollover Individual
Retirement Account is Beachtree Capital Group, One Rockefeller Plaza,
Suite 1600, New York, New York 10020.

(27) The address of Scott R. McQueen is 1921 Gallows Road, Vienna, Virginia
22182.

(28) The address of Randall T. Odeneal is 1921 Gallows Road, Vienna, Virginia
22182.

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RELATIONSHIP BETWEEN ATS AND ARS

ATS, ARS and CBS have entered into the ARS-ATS Separation Agreement to
provide, among other things, for (i) the sharing of various liabilities and
obligations, including without limitation those relating to the taxes payable
by ARS as a consequence of the consummation of the CBS Merger, (ii) certain
adjustments based on ARS's working capital and indebtedness as of the
Effective Time of the CBS Merger, and (iii) the leasing of space to ARS on
certain of ATS's towers. The following is a summary description of the rights
and obligations of the parties under the ARS-ATS Separation Agreement, a copy
of which has been filed as an exhibit to the Registration Statement. The
summary is qualified in its entirety by reference to the full and complete
text of the ARS-ATS Separation Agreement. Certain terms used in this Section
without definition are defined in the ARS-ATS Separation Agreement or
incorporated therein by reference to the CBS Merger Agreement.

SHARING OF TAX AND OTHER CONSEQUENCES

With respect to the terms and conditions of the CBS Merger, including the
sharing of the tax consequences thereof, the ARS-ATS Separation Agreement
provides as follows:

(a) American Tower Systems is obligated to indemnify CBS and American
Radio and its Subsidiaries (other than the Tower Subsidiaries, collectively
the "ATS Group") harmless from and against any liabilities (other than
certain tax liabilities) to which American Radio or any of its Subsidiaries
(other than the ATS Group) may be or become subject that relate to or arise
from the assets, business, operations, debts or liabilities of the ATS
Group, including without limitation (i) the assets to be transferred to
American Tower Systems except certain leases listed in the CBS Merger
Agreement, including without limitation, (x) the assets (or debts or
liabilities associated therewith) to be transferred to American Tower
Systems pursuant to the provisions of Article 11 of the ARS-ATS Separation
Agreement and (y) any wireless communication infrastructure assets
previously owned or controlled by American or any Tower Subsidiary which
have been disposed of by American Radio or any such Tower Subsidiary prior
to the Effective Time, (ii) liabilities (A) in connection with the
distribution of the Tower Stock Consideration as part of the CBS Merger,
(B) relating to or arising from any agreement, arrangement or understanding
(other than the Tower Documentation) entered into by American Radio, ATS or
any member of the American Tower Group (x) for the benefit of any member of
the American Tower Group, (y) in contemplation of the CBS Merger or (z)
with respect to the sale, assignment, transfer or other disposition of
shares of Common Stock, (C) relating to or arising from any untrue
statement or alleged untrue statements of a material fact contained in the
Prospectus furnished to the holders of ARS Convertible Preferred Stock, any
proxy statement used in connection with any ARS stockholder meeting with
respect to approval of the Tower Merger, the Registration Statement or in
any document filed, or any document delivered to any securityholder of
American Radio, or required to be filed in connection with the CBS Merger,
or in any document filed or required to be filed by American or any member
of the American Tower Group in connection with the preceding clause (B) or
any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading, except
with respect to information provided by or relating solely to American
Radio (excluding ATS Mergercorp and the American Tower Group) which is
contained in or expressly consistent with the Filed American SEC Documents
or the American Form 10-Q for the nine months ended September 30, 1997
filed by American Radio with the Commission under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), or (D) in connection with any
action or omission of any Tower Employee for the benefit of, including
without limitation in furtherance of the business of, any member of the
American Tower Group or in connection with or incident to such employee's
duties and responsibilities as a Tower Employee, (iii) any economic impact
related to or arising from the failure to obtain any government
authorizations, private authorizations or other third party consents, or to
make any governmental filings, necessary to consummate the CBS Merger, and
(iv) the rental and related expenses for the relevant portion of the leased
premises located at 116 Huntington Avenue, Boston Massachusetts in the
event of the failure to obtain the landlord's consent to the assignment of
the obligations relating to, or sublease of, such relevant portion of such
premises.

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(b) American Radio is obligated to indemnify the ATS Group and hold it
harmless from and against any liabilities (other than certain tax
liabilities) to which the ATS Group may be or become subject that relate to
or arise from the assets, business, operations, debts or liabilities of
American Radio or its Subsidiaries (other than the ATS Group) whether
arising prior to, concurrent with or after the CBS Merger.

(c) The allocation of Tax liabilities and deconsolidation of American
Radio and the ATS Group is to be made in accordance with the principles set
forth in the ARS-ATS Separation Agreement, including without limitation
that ATS is obligated to indemnify (and make whole on an after-tax basis)
CBS for all Taxes imposed by any Taxing Authority on any member of the
American Tax Group or on CBS as a result of or in connection with sale or
transfer of assets to the American Tower Group pursuant to Section 11.2 of
the ARS-ATS Separation Agreement (or between members of the American Tax
Group prior to the final transfer to a member of the American Tower Group
or between members of the American Tower Group), the CBS Merger, the Tower
Separation, any other disposition of stock of ATS contemplated or permitted
by the CBS Merger Agreement, or the merger of ATS with any other Person, as
the case may be, including without limitation any Taxes on any gain to any
member of the American Tax Group arising under Section 311 of the Code, any
Taxes on any deferred gain to any member of the American Tax Group
triggered as a result of or upon any such event, any gain attributable to
any excess loss account triggered upon any such event, any Taxes arising as
a result of the election or other transactions contemplated by Section
4.2(j) of the ARS-ATS Separation Agreement, income or gain arising as a
result of transactions described in Section 6.8(a) of the CBS Merger
Agreement (payments to holders of ARS Options of the CBS Merger
consideration), as a result of transactions on or about January 20-21, 1998
involving American Tower Systems, L.P. or interests therein, as a result of
the timing of the payment of Taxes (including, without limitation, any
estimated Taxes) under the ARS-ATS Separation Agreement, and gain on the
conversion of ARS Convertible Preferred Stock into Common Stock, and any
transfer Taxes arising from any such event, all to the extent that the
additional liability for such Taxes payable by the American Tax Group as a
consequence of such events (on a "but for" basis) exceeds $20,000,000. ATS
is entitled to pursue in the name of ARS, but for its own account and at
its own cost and expense, a refund claim with respect to the issue of
whether the tax indemnity required under the ARS-ATS Separation Agreement
gives rise to an adjustment to the tax basis of ARS's interest in American
Tower (the so-called "make-whole" provision). The ARS-ATS Separation
Agreement also provides that, subject to certain limitations, in computing
the amount of taxable gain that is recognized by ARS in connection with the
distribution of the Common Stock, ARS shall, if so requested by ATS, report
the amount so realized based on the "fair market value" of such stock as
determined by an appraisal prepared by a mutually agreed upon appraiser.

(d) The ARS-ATS Separation Agreement provides that a member of the ATS
Group shall assume to the extent permitted by the landlord, the obligations
under the lease of 116 Huntington Avenue, Boston, Massachusetts, with
respect to the relevant portion of such leased premises.

(e) American Radio is obligated to transfer, or cause its Subsidiaries to
transfer, to ATS the communications towers agreed upon by CBS and American
Radio prior to the execution of the CBS Merger Agreement (the "Transferred
Towers"), and ATS is obligated to assume all of American Radio's and such
Subsidiaries' obligations with respect to the Transferred Towers to the
extent set forth in the ARS-ATS Separation Agreement.

(f) Upon the consummation of the CBS Merger, certain employees of
American Radio (the "ATS Employees") were offered full-time employment by
ATS or one of its Subsidiaries. Members of the ATS Group have agreed, for a
period of eighteen (18) months following the consummation of the CBS
Merger, not to actively solicit or seek to hire any employees of American
Radio or its Subsidiaries not engaged in the business of the ATS Group as
of the date of the original CBS Merger agreement, other than the ATS
Employees, it being understood and agreed that such agreement shall not be
deemed to prevent members of the ATS Group from placing general
advertisements in publications or on the Internet or soliciting any such
employee who (i) initiates employment discussions with a member of the ATS
Group or (ii) is not employed by American Radio or CBS or any of their
respective Subsidiaries on the date such a member first solicits such
employee.

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The ARS-ATS Separation Agreement contains detailed provisions with respect
to the rights and obligations of the Indemnitees and the indemnifying parties,
including as to when the indemnifying party is not entitled to assume the
defense of certain Third Party Actions. For a complete description of the
material terms and conditions of the ARS-ATS Separation Agreement relating to
the sharing of tax and other liabilities, see the ARS-ATS Separation
Agreement. See also "Prospectus Summary--American Tower Systems--CBS Merger"
and "Unaudited Pro Forma Condensed Consolidated Financial Statements of
American Tower Systems".

CLOSING DATE ADJUSTMENTS

The ARS-ATS Separation Agreement also contains provisions relating to
adjustments of the amount required to be paid by CBS in the CBS Merger, based
on American Radio's working capital and indebtedness as of the Closing Date.
Any such adjustments are required to be paid by or to ATS. With respect to
such adjustments, the ARS-ATS Separation Agreement provides, among other
things, for an adjustment as follows:

(a) Subject to paragraph (c) below, if Closing Working Capital is less
than $70,000,000 (the "WC Amount"), then ATS shall, and if Closing Working
Capital is greater than the WC Amount, CBS shall, owe the other the amount
of such difference. The term "Working Capital" shall mean Current Assets
minus Liabilities. The terms "Current Assets" and "Liabilities" shall mean
the current assets and liabilities of the Post-Closing American Group
calculated in accordance with GAAP, except that (i) outstanding principal
amount of indebtedness and liquidation preference of preferred stock will
be excluded, (ii) cash will be excluded, (iii) accruals for taxes will be
included except that (A) tax liabilities which ATS is obligated to
indemnify American Radio and its Subsidiaries (other than the American
Tower Group) pursuant to the provisions of the Tower Documentation, and
deferred income Tax assets and liabilities that exist or arise from
differences in basis for Tax and financial reporting purposes attributable
to acquisitions, exchanges and dispositions or attributable to depreciation
and amortization, shall not be taken into account, (B) Tax benefits arising
from the exercise or cancellation of options between the date of the
original CBS Merger Agreement and the Effective Time shall not be taken
into account, and (C) accruals for taxes relating to acquisitions,
exchanges or dispositions will be determined in accordance with ARS's past
accounting practices, (iv) Current Assets will be increased by amount equal
to the sum of (x) the amount derived by multiplying the Cash Consideration
by the number of shares of ARS Common Stock held in its treasury as of the
Effective Date and (y) the aggregate amount of the spread of $44.00 over
the exercise price of each ARS Option outstanding on the date of the
Original CBS Merger Agreement terminated or canceled prior to the Effective
Time or for which the holder has elected to receive an option to acquire
Common Stock in lieu thereof, less the tax benefit that would have been
received with respect to the exercise of such options, (v) Current Assets
will be (A) increased (if the number of shares of ARS Common Stock issuable
upon conversion of the ARS Convertible Preferred Stock is fewer than
3,750,000) by an amount equal to the amount derived by multiplying the Cash
Consideration by the excess of (I) 3,750,000 less (II) the number of shares
of ARS Common Stock issuable upon conversion of the ARS Convertible
Preferred Stock or (B) decreased (if the number of shares of ARS Common
Stock issuable upon conversion of the ARS Convertible Preferred Stock is
greater than 3,750,000) by an amount equal to the amount derived by
multiplying the Cash Consideration by the excess of (I) the number of
shares of ARS Common Stock issuable upon conversion of the ARS Convertible
Preferred Stock less (II) 3,750,000, (vi) liabilities from the radio
broadcasting rights contracts for St. Louis Rams games will be limited to
$3,300,000, and (vii) amounts owed by American Tower Systems to American
Radio pursuant to Section 16.3 of the ARS-ATS Separation Agreement (i.e.,
certain expenses related to ATS) shall be excluded from Current Assets and
liabilities with respect to such amounts shall be excluded from
Liabilities.

(b) Subject to paragraph (c) below, if Closing Net Debt is greater than
the Debt Amount minus $50,419,000, minus cash received by the Post-Closing
American Group in respect of options exercised between the date of the
Original CBS Merger Agreement and the Effective Time (the "CD Amount"), ATS
shall, and if Closing Net Debt is less than the CD Amount, CBS shall, owe
the other the amount of such difference. "Debt Amount" shall mean
$1,066,721,000, subject to adjustment for the failure to consummate any of
the Recent Transactions relating to American Radio and for the consummation
of any other acquisitions or dispositions. The term "Net Debt" shall mean
outstanding principal amount of indebtedness

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(including, without duplication, guarantees of indebtedness) plus
outstanding liquidation preference of all preferred stock (other than the
ARS Convertible Preferred Stock), including, without limitation, the
aggregate liquidation preference of any junior preferred security issued by
American to CBS, minus cash, including, without limitation, the aggregate
purchase price of any junior preferred security issued by American to CBS.

(c) The amounts owed pursuant to the provisions of paragraphs (a) and (b)
above shall be aggregated or netted, as appropriate (the resulting amount,
the "Adjustment Amount"). In the event that the Adjustment Amount minus
$10,000,000 is greater than $0 (the "Final Adjustment Amount"), the party
that owes the Final Adjustment Amount will make payment by wire transfer of
immediately available funds of the Final Adjustment Amount together with
interest thereon at a rate of interest equal to the lesser of (i) 10% per
annum and (ii) if ATS is being charged a rate of interest by a financial
institution, such rate, but in no event lower than the prime rate as
reported in the Wall Street Journal on the date of the Closing Statement
becomes final and binding on the parties, calculated on the basis of the
actual number of days elapsed divided by 365, from the date of the
Effective Time to the date of actual payment.

(d) In the event ATS and CBS cannot agree on any item, the dispute will
be resolved by the Accounting Firm, whose authority is limited to whether
the Closing Statement was prepared in compliance with the requirements set
forth above and the allocation of the costs of dispute resolution, and the
Accounting Firm is not to make any other determination.

(e) During the period of time from and after the delivery of the Closing
Statements to ATS through the date the Closing Statement becomes final and
binding on CBS, ARS and ATS, CBS will cause the Post-Closing American Group
to afford ATS and any accountants, counsel or financial advisors retained
by ATS in connection with the adjustments described above reasonable access
(with the right to make copies) during normal business hours to the books
and records of the Post-Closing American Group to the extent relevant to
the adjustments.

(f) Any adjustment pursuant to Article 10 of the ARS-ATS Separation
Agreement (i.e., these provisions) shall be taken into account in the
calculation of Tax liability pursuant to Section 4.2(b) of the ARS-ATS
Separation Agreement, and any increase or decrease in the amount of Taxes
that are reimbursable or indemnifiable by the ATS Group as a result of any
such adjustment shall be treated as an adjustment to Taxes described in
Section 4.2(f) of the ARS-ATS Separation Agreement.

See "Risk Factors--Relationship Between ATS and ARS--Certain Contingent
Obligations" for information concerning certain issues that have arisen
between ATS and CBS with respect to the interpretation and intent of the
working capital adjustments and the CBS Merger Agreement generally.

See Section Article 10 of the ARS-ATS Separation Agreement for a complete
description of the Closing Date adjustments. See also "Prospectus Summary--
American Tower Systems--CBS Merger" and "Unaudited Pro Forma Condensed
Consolidated Financial Statements of American Tower Systems".

LEASE ARRANGEMENTS

In connection with the consummation of the CBS Merger, ATS and ARS entered
into the definitive documentation ("Tower Leases") with respect to certain
broadcasting towers ("Towers"). The markets in which such Towers are located
and the annual "market price" for each antenna are set forth in Exhibit B to
the CBS Merger Agreement. Subject to certain exceptions, 14 of the Towers were
owned or leased by ARS and in January 1998 became the property of ATS; the
balance will be transferred by ARS to ATS upon acquisition by ARS. Each of the
Tower Leases contains or will contain standard and customary terms and
conditions including the following: (a) with certain exceptions, each Tower
Lease will be for a term of twenty (20) years with four (4) renewal periods of
five (5) years each; each such renewal to be upon the same terms and
conditions as the original Tower Lease; (b) prior to the Effective Time, ARS
used its best efforts to extend the term of each lease ("Land Leases") to a
minimum duration of twenty (20) years, inclusive of renewal periods, if any,
and provide CBS with respect to the Towers subject to the extended Land
Leases, tower leases with the equivalent benefits set forth in clauses (c),
(d) and (e) and for a minimum duration of twenty (20) years ("Extended Tower
Leases"). With respect to any such Land Leases that was not so extended
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ATS and CBS agreed upon definitive documentation to provide CBS with respect
to the Towers subject to such
Land Leases, tower leases with the benefits equivalent of such Extended Tower
Leases or mutually agreed to alternative arrangements providing equivalent
value to CBS; (c) each Tower Lease will provide that no payments will be
payable by CBS for a period of three (3) years from the consummation of the
CBS Merger; for the next three (3) years the payments will be as follows: one-
third ( 1/3) of the market price as set forth in Exhibit B to the CBS Merger
Agreement corresponding to each FM antenna (or AM/FM antenna) for year four
(4); two-thirds ( 2/3) for year five (5) and full market price for year six
(6); thereafter, for the balance of the term and any renewals thereof, the
payments will be the market price, together with an annual increase every
year, beginning for year seven (7), of the lesser of five percent (5%) or the
Consumer Price Index for all Urban Consumers over the previous year's payments
(except with respect to three leases which such payments began at the
consummation of the CBS Merger, with respect to CBS, and began on January 1,
1998 as between ARS and ATS); (d) all expenses for taxes, insurance,
maintenance and utilities in respect of each Tower will be paid by ATS; and
(e) ATS has assumed the obligation and responsibility for complying with all
applicable law with respect to the Towers.

See Article 11 of the ARS-ATS Separation Agreement for a more complete
description of the lease arrangements.

TRANSITIONAL SERVICES

Each of CBS, ARS and ATS have agreed, subject to the terms and conditions of
the ARS-ATS Separation Agreement, from and after the consummation of the CBS
Merger, to use its reasonable best efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, and to assist and cooperate with the
other in doing, all things necessary, proper or advisable to provide, in the
most expeditious manner practicable, the goods and/or services described in
Article 12 of the ARS-ATS Separation Agreement, including without limitation,
with respect to, among other things, (i) making its employees, including
senior management, available (x) to assist in the preparation of all documents
(including tax returns) required to be filed with governmental authorities
(including the Commission) or furnished to security holders, (y) to consult
regarding the financial software systems currently used by ARS, and (z) to
assist in the consummation of all pending acquisitions, exchanges and
dispositions or other transactions of ARS and resolving any existing
contingent liabilities of ARS, (ii) providing financial and other information
with respect to ATS required by CBS or ARS in connection with the preparation
of all documents required to be filed with governmental authorities (including
the Commission) or furnished to security holders, and (iii) making available
or assisting in obtaining all documents prepared for ARS by its independent
accountants and counsel. ATS is obligated to deliver promptly to CBS all books
and financial and other records of ARS in its possession (including those
located at ATS's corporate headquarters) and all software and hardware located
at such corporate headquarters. ATS is entitled to access to and to make
copies of all documents, records and other material delivered to CBS.

For a description of the terms and conditions of the ARS-ATS Separation
Agreement relating to the providing of transactional services, see Article 12
of the ARS-ATS Separation Agreement.

EXPENSES

Promptly following the consummation of the CBS Merger, ATS is obligated to
pay to ARS in immediately available funds (and make ARS whole on an after-tax
basis under the principles set forth in the ARS-ATS Separation Agreement) an
amount equal to the aggregate costs and expenses incurred by ARS in connection
with any agreement, arrangement or understanding (other than the Tower
Documentation) entered into by ARS, ATS Mergercorp or any member of the
American Tower Group following the date of the original CBS Merger Agreement
(x) for the benefit of any member of the American Tower Group, (y) in
contemplation of the consummation of the CBS Merger or (z) in connection with
the sale, assignment, transfer or other disposition of shares of Common Stock,
including without limitation such costs and expenses incurred by ARS to
Merrill Lynch (as part of the Stock Purchase Agreement) and any such costs and
expenses incurred by ARS to Credit Suisse First Boston in excess of those set
forth in the engagement letter between ARS and Credit Suisse First Boston
provided by ARS to CBS. See Section 16.3 of the ARS-ATS Separation Agreement.

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INDEBTEDNESS OF ATS

The summary contained herein of the material provisions of the New Credit
Facilities does not purport to be complete and is qualified in its entirety by
reference to the New Credit Facilities, which are filed as an exhibit to the
Registration Statement of which this Prospectus is a part and to which exhibit
reference is made hereby. Capitalized terms used in this Section which are not
otherwise defined in this Prospectus shall have the meaning ascribed thereto
in the New Credit Facilities.

In order to finance acquisitions of communications sites and other related
businesses and the construction of towers and for general corporate purposes,
ATS and the Operating Subsidiaries have borrowed and expect to continue to
borrow under the New Credit Facilities. The New Credit Facilities with the
Operating Subsidiaries provide for $900.0 million credit facilities maturing
at the earlier of (a) eight years or (b) June 30, 2006 consisting of the
following: (i) a $250.0 million multiple-draw term loan, (ii) a $400.0 million
reducing revolving credit facility and (iii) a $250.0 million 364-day
revolving credit facility that converts to a term loan facility thereafter.
The revolving credit commitments are required to be reduced and the terms
loans are required to be amortized, in both cases, quarterly, in increasing
amounts designed to amortize the loans by maturity, commencing June 30, 2001.
The New Credit Facility with ATS provides for a $150.0 million term loan
maturing at the earlier of (i) eight and one-half years or (ii) December 31,
2006, amortizing quarterly in an amount equal to 2.5% of the principal amount
outstanding at June 30, 2001 at the end of each quarter between such date and
June 30, 2006, both inclusive, and the balance in two equal installments on
September 30 and December 31, 2006. The ATS New Credit Facility was fully
drawn at closing.

Until interest rates are fixed or capped at ATS's request, all outstanding
amounts under the New Credit Facilities of the Operating Subsidiaries bear
interest at a variable base rate plus a variable margin based on certain of
ATS's financial ratios. Interest rates under the New Credit Facilities of the
Operating Subsidiaries are determined, at the option of ATS, at either the
LIBOR Rate plus 0.75% to 2.25% or the Base Rate plus 0.00% to 1.25%. The
spread over the LIBOR Rate and the Base Rate varies from time to time,
depending upon ATS's financial leverage. The Operating Subsidiaries pay
quarterly commitment fees equal to (i) 0.250% or 0.375% per annum, in each
case depending on their financial leverage, on the aggregate unused portion of
the aggregate $650.0 million commitment, and (ii) 0.125% on the additional
$250.0 million commitment (until such time as ATS elects to make it part of
the permanent commitment). Borrowings may be made under the New Credit
Facilities by the Operating Subsidiaries only so long as they remain in
compliance with certain financial ratios and meet certain other conditions.
The New Credit Facility provides for interest rates determined, at the option
of ATS, of either the LIBOR Rate (as to be defined) plus 3.50% or the Base
Rate (as to be defined) plus 2.5%.

Indebtedness may be incurred under the New Credit Facilities for
acquisitions, construction and other capital expenditures, working capital and
general corporate purposes, including satisfaction of ATS obligations under
the ARS-ATS Separation Agreement with respect to any closing date balance
sheet adjustments. The New Credit Facilities of the Operating Subsidiaries
require the maintenance of the following ratios: (i) Senior Debt to Annualized
Operating Cash Flow of not more than 6.50:1 declining in stages to 3.00:1 by
September 30, 2003 and thereafter; (ii) Total Debt (which includes debt of
ATS) to Annualized Operating Cash Flow of not more than 8.00:1 declining in
stages to 4.00:1 by September 30, 2003 and thereafter; (iii) Annualized
Operating Cash Flow to Fixed Charges ratio of not less than 1.05:1; (iv)
Annualized Operating Cash Flow to Interest Expense of not less than 1.50:1
increasing to 2.50:1 at December 31, 2003 and thereafter; and (v) Annualized
Operating Cash Flow to Pro Forma Debt Service ratio of not less than 1.10:1
increasing to 1.150:1 at December 31, 2002 and thereafter. The Total Debt to
Annualized Operating Cash Flow ratio is also contained in ATS's New Credit
Facility.

The New Credit Facilities contain certain financial and operational
covenants and other restrictions with which ATS and the Operating Subsidiaries
must comply, whether or not there are any borrowings outstanding, including,
among other things, restrictions on acquisitions (of communications site
management businesses), additional indebtedness, capital expenditures and
investments in Unrestricted Subsidiaries, and restricts the ability of ATS and
the Operating Subsidiaries to pay dividends or make other distributions, and
to redeem,

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<PAGE>

purchase or otherwise acquire shares of its capital stock or other equity
interests and prohibit any such dividend, distribution, redemption, purchase
or other acquisition during the existence of a Default or Event of Default
thereunder. See "Description of Capital Stock--Dividend Restrictions". ATS's
New Credit Facility prohibits the repayment of the indebtedness outstanding
thereunder without the consent of the lenders.

The loans to ATS and the Operating Subsidiaries are cross-guaranteed and
cross-collateralized by substantially all of the assets of the consolidated
group.

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DESCRIPTION OF CAPITAL STOCK

The following summary description of the terms of the capital stock of ATS,
including the Interim Preferred Stock and of the Exchange Preferred Stock
(collectively sometimes referred to as the "Senior Preferred Stock") is
qualified in its entirety by reference to the ATS Restated Certificate (which
includes the Certificate of Designation of the Interim Preferred Stock (the
"Interim Certificate of Designation") and the Certificate of Designation of
the Exchange Preferred Stock (the "Exchange Certificate of Designation" and,
collectively with the Interim Certificate of Designation, the "Certificates of
Designation")), a copy of each of which has been filed with the Commission and
is part of the Registration Statement of which this Prospectus is a part and
the summary herein of certain provisions thereof does not purport to be
complete and is subject to, and is qualified in its entirety by, reference
thereto. Certain terms used in this summary without definition are defined in
the ATS Restated Certificate, including one or both of the Certificates of
Designation and, unless otherwise noted, have the same meaning as given such
terms therein.

GENERAL

The authorized capital stock of American Tower Systems consists of
20,000,000 shares of Preferred Stock, $.01 par value per share (the "Preferred
Stock") 300,000,000 shares of Class A Common Stock, $.01 par value per share,
50,000,000 shares of Class B Common Stock, $.01 par value per share, and
10,000,000 shares of Class C Common Stock, $.01 par value per share. The
outstanding shares of Common Stock (there being no Preferred Stock
outstanding) as of June . , 1998 were as follows: Class A Common Stock--
65,137,652 Class B Common Stock--9,140,363; and Class C Common Stock--
3,295,518.

PREFERRED STOCK

The 20,000,000 authorized and unissued shares of Preferred Stock may be
issued with such designations, preferences, limitations and relative rights as
the ATS Board may authorize, including, but not limited to: (i) the
distinctive designation of each series and the number of shares that will
constitute such series; (ii) the voting rights, if any, of shares of such
series; (iii) the dividend rate on the shares of such series, any restriction,
limitation or condition upon the payment of such dividends, whether dividends
shall be cumulative, and the dates on which dividends are payable; (iv) the
prices at which, and the terms and conditions on which, the shares of such
series may be redeemed, if such shares are redeemable; (v) the purchase or
sinking fund provisions, if any, for the purchase or redemption of shares of
such series; (vi) any preferential amount payable upon shares of such series
in the event of the liquidation, dissolution or winding-up of ATS or the
distribution of its assets; and (vii) the price or rates of conversion at
which, and the terms and conditions on which the shares of such series may be
converted into other securities, if such shares are convertible. Although ATS
has no present intention to issue shares of Preferred Stock, the issuance of
Preferred Stock, or the issuance of rights to purchase such shares, could
discourage an unsolicited acquisition proposal.

Interim Preferred Stock. The Interim Preferred Stock has an initial
aggregate liquidation preference of $310.0 million and is issued in the form
of a redeemable pay-in-kind preferred stock that is senior to all future
issues of Preferred Stock (other than the Exchange Preferred Stock). The
Interim Preferred Stock is subject to mandatory redemption one year after
issue or, to the extent not so redeemed, is exchangeable, at the option of the
holder, for shares of Exchange Preferred Stock with a liquidation preference
equal to the liquidation of the Interim Preferred Stock so exchanged plus the
applicable Redemption Premium (as defined in the Certificate of Designation of
the Interim Preferred Stock). The Interim Preferred Stock pays dividends,
which may be paid in kind, at a rate equal to three-month LIBOR plus a margin
which will increase based on the length of time the Interim Preferred Stock is
outstanding. The Interim Preferred Stock is subject to mandatory redemption
one year after the issuance of any Interim Preferred Stock (the "Redemption
Date"). If the Interim Preferred is not redeemed on the Redemption Date, the
holders of the Interim Preferred will have the option to either exchange the
Interim Preferred into the Exchange Preferred Stock or collect dividends at
the default rate which shall be set at the greater of the dividend rate
payable on the Exchange Preferred Stock or the rate that is payable on the
Interim Preferred Stock on the Redemption Date plus 2%. The Exchange Preferred
Stock pays dividends at the

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greater of (i) the interest rate on eleven year U.S. Treasury Securities (the
"Treasury Rate") on the Redemption Date plus the spread applicable to that
time and (ii) the Treasury Rate on the date of issuance plus the spread
applicable at that time. The Exchange Preferred Stock will be exchangeable at
ATS's option into subordinated notes. The Interim Preferred Stock and the
Exchange Preferred contain provisions customary to similar securities
including a change of control provision and provisions permitting the election
of two additional directors to the ATS Board of Directors in the event of
certain defaults. The Interim Preferred will be redeemed out of the proceeds
of this Offering.

COMMON STOCK

Dividends. Holders of record of shares of Common Stock on the record date
fixed by the ATS Board are entitled to receive such dividends as may be
declared by the ATS Board out of funds legally available for such purpose. No
dividends may be declared or paid in cash or property on any share of any
class of Common Stock, however, unless simultaneously the same dividend is
declared or paid on each share of the other classes of Common Stock, except
that in the event of any such dividend in which shares of stock of any company
(including American Tower Systems or any of its Subsidiaries) are distributed,
such shares may differ as to voting rights to the extent that voting rights
now differ among the different classes of Common Stock. In the case of any
dividend payable in shares of Common Stock, holders of each class of Common
Stock are entitled to receive the same percentage dividend (payable in shares
of that class) as the holders of each other class.

Voting Rights. Except as otherwise required by law and in the election of
directors, holders of shares of Class A Common Stock and Class B Common Stock
have the exclusive voting rights and will vote as a single class on all
matters submitted to a vote of the stockholders, with each share of Class A
Common Stock entitled to one vote and each share of Class B Common Stock
entitled to ten votes. The holders of the Class A Common Stock, voting as a
separate class, have the right to elect two independent directors. The Class C
Common Stock is nonvoting except as otherwise required by Delaware law.

Under Delaware law, the affirmative vote of the holders of a majority of the
outstanding shares of any class of common stock is required to approve, among
other things, a change in the designations, preferences and limitations of the
shares of such class of common stock. Under the ATS Restated Certificate, the
affirmative vote of the holders of not less than 66 2/3% of the Class A Common
Stock and Class B Common Stock, voting as a single class, is required in order
to amend most of the provisions of the ATS Restated Certificate, including
those relating to the provisions of the various classes of Common Stock,
indemnification of directors, exoneration of directors for certain acts, and
such super-majority provision.

Conversion Provisions. Shares of Class B Common Stock and, except as
hereinafter noted, Class C Common Stock are convertible, at any time at the
option of the holder, on a share for share basis into shares of Class A Common
Stock. The present owner of Class C Common Stock can convert such stock only
in the event of a Conversion Event (as defined in the ATS Restated
Certificate) or with the consent of the ATS Board. Shares of Class B Common
Stock automatically convert into shares of Class A Common Stock upon any sale,
transfer, assignment or other disposition other than to Permitted Transferees
(as defined in the ATS Restated Certificate) which term presently includes
certain family members, trusts and other family entities and charitable
organizations and upon pledges but not to the pledgee upon foreclosure.

ATC Merger Amendments. As a condition of consummation of the ATC Merger
Agreement, the ATS Restated Certificate was amended to (i) limit the aggregate
voting power of Steven B. Dodge (and his Controlled Entities as defined
therein) to 49.99% of the aggregate voting power of all shares of capital
stock entitled to vote generally from the election of directors (less the
voting power represented by the shares of Class B Common Stock acquired by the
Stoner Purchasers (as defined therein) pursuant to the Stock Purchase
Agreement and owned by them or any of their Controlled Entities on Family
Members at such time), (ii) prohibit future issuances of Class B Common Stock
(except upon exercise of then outstanding options and pursuant to stock
dividends or stock splits), (iii) limit transfers of Class B Common Stock to a
more narrow group than had previously been provided, (iv) provide for
automatic conversion of the Class B Common Stock to Class A Common Stock at

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such time as the aggregate voting power of Mr. Dodge (and his Controlled
Entities) falls below either (x) 50% of their initial aggregate voting power
(immediately after consummation of the ATC Merger) or (y) 20% of the aggregate
voting power of all shares of Common Stock at the time outstanding, and (v)
require consent of the holders of a majority of Class A Common Stock for
amendments adversely affecting the Class A Common Stock.

Liquidation Rights. Upon liquidation, dissolution or winding-up of ATS, the
holders of each class of Common Stock are entitled to share ratably (based on
the number of shares held) in all assets available for distribution after
payment in full of creditors and payment in full to any holders of the
Preferred Stock then outstanding of any amount required to be paid under the
terms of the Preferred Stock.

Other Provisions. The holders of Common Stock are not entitled to preemptive
or subscription rights. The shares of Common Stock presently outstanding are
validly issued, fully paid and nonassessable. In any merger, consolidation or
business combination, the consideration to be received per share by holders of
each class of Common Stock must be identical to that received by holders of
the other class of Common Stock, except that in any such transaction in which
shares of Common Stock (or any other company) are distributed, such shares may
differ as to voting rights to the extent that voting rights now differ among
the different classes of Common Stock. No class of Common Stock may be
subdivided, consolidated, reclassified or otherwise changed unless,
concurrently, the other classes of Common Stock are subdivided, consolidated,
reclassified or otherwise changed in the same proportion and in the same
manner.

DIVIDEND RESTRICTIONS

ATSI is prohibited under the terms of its New Credit Facilities from paying
cash dividends or making other distributions on, or making redemptions,
purchases or other acquisitions of, its capital stock (including Preferred
Stock) except that, beginning on April 15, 2001, ATSI may, if no Default
exists or would be created thereby under the New Credit Facilities, pay cash
dividends to the extent that Restricted Payments do not exceed (i)(x) 50% of
Excess Cash Flow for the preceding calendar year minus (y) any portion thereof
used to invest in Unrestricted Subsidiaries, or (ii) (x) 50% of the net
proceeds of any equity offering minus (y) any portion thereof used to invest
in Unrestricted Subsidiaries (as each such term is defined in the New Credit
Facilities). Comparable restrictions are imposed on the ability of ATSLP to
make distributions to its partners. Since ATS has no other assets other than
its ownership of all of the capital stock of the Operating Subsidiaries, its
ability to pay dividends to its stockholders in the foreseeable future is
restricted. ATS's New Credit Facility also restricts cash dividends and other
distributions on, and redemptions, purchases or other acquisitions of, ATS
capital stock, except out of the net proceeds of any equity offering not used
for other permitted purposes (such as investments in Unrestricted
Subsidiaries).

DELAWARE BUSINESS COMBINATION PROVISIONS

Under the DGCL, certain "business combinations" (including the issuance of
equity securities) between a Delaware corporation and any person who owns,
directly or indirectly, 15% or more of the voting power of the corporation's
shares of capital stock (an "Interested Stockholder") must be approved by the
holders of at least 66 2/3% of the voting stock not owned by the Interested
Stockholder if it occurs within three years of the date such person became an
Interested Stockholder unless prior to such date the ATS Board approved either
the business combination or the transaction which resulted in the stockholder
becoming an Interested Stockholder. The CBS Merger and the Stock Purchase
Agreement were approved by the ATS Board.

LISTING OF CLASS A COMMON STOCK

The Class A Common Stock is traded on the NYSE under the symbol "AMT".

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock is Harris Trust and
Savings Bank, 311 West Monroe Street, Chicago, Illinois 60606 (telephone
number (312) 461-4600).

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SHARES ELIGIBLE FOR FUTURE SALE

GENERAL

Upon completion of the Offering, there will be an aggregate of approximately
97.5 million shares of Common Stock outstanding. All of such shares, other
than an aggregate of approximately 6.1 million shares issued in connection
with the Gearon Transaction and certain other acquisitions and the 8.0 million
shares issued pursuant to the Stock Purchase Agreement, will be freely
transferable without restriction or future registration under the Securities
Act of 1933, as amended (the "Securities Act"), unless held by an "affiliate"
(as that term is defined under the Securities Act) of ATS. Persons who may be
deemed to be affiliates of ATS after the CBS Merger generally include
individuals or entities that directly, or indirectly through one or more
intermediaries, control, are controlled by, or are under common control with,
ATS. Persons who are affiliates of ATS will be permitted to sell their Common
Stock received pursuant to the CBS Merger only pursuant to an effective
registration statement under the Securities Act or pursuant to an exemption
from registration under the Securities Act, such as the exemption afforded by
Rule 144 thereunder. Stockholders who received unregistered shares of Common
Stock, including pursuant to the Stock Purchase Agreement and the Gearon
Transaction, as well as certain "affiliates" of ATS have certain demand and
"piggy-back" registration rights with respect to their shares of Common Stock.

In general, under Rule 144 as currently in effect, any person (or persons
whose shares are aggregated) who has beneficially owned restricted shares of
Common Stock for at least one year is entitled to sell, within any three-month
period, a number of such shares which does not exceed the greater of 1% of the
then outstanding shares of Class A Common Stock (approximately 850,000 shares)
or the average weekly public trading volume of the Class A Common Stock during
the four calendar weeks preceding the date on which notice of the sale is
filed with the Commission. Sales under Rule 144 are also subject to certain
manner of sale provisions, notice requirements and the availability of current
public information about ATS. Any person (or persons whose shares are
aggregated) who has not been an affiliate of ATS at any time during the past
three months preceding a sale and who has owned shares of Common Stock for at
least two years is entitled to sell such shares under Rule 144(k) without
regard to the volume limitations, manner of sale provisions, public
information or notice requirements of Rule 144. In February 1997, the
Commission solicited comments regarding certain proposed amendments to Rule
144, including reducing the aforementioned one year and two year holding
periods.

Options to purchase an aggregate of approximately 10.5 million shares of
Common Stock will be outstanding immediately following this Offering. Shares
of Common Stock issued upon exercise of such options are registered on Form S-
8 under the Securities Act and, therefore, freely transferable under the
securities laws. American Tower Systems has entered into agreements to
register shares of Common Stock under the Securities Act issued pursuant to
the Stock Purchase Agreement, the ATC Merger, the Gearon Transaction, certain
other acquisitions and shares held by certain affiliates of ATS.

American Tower Systems cannot make any predictions as to the effect, if any,
sales of shares of Common Stock, or the availability of shares for future
sale, will have on the market price of the Class A Common Stock prevailing
from time to time.

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UNDERWRITING

Under the terms and subject to the conditions contained in an Underwriting
Agreement dated June . , 1998 (the "Underwriting Agreement"), the
Underwriters named below (the "Underwriters"), for whom Credit Suisse First
Boston, BT Alex. Brown Incorporated, Lehman Brothers Inc., Morgan Stanley &
Co. Incorporated, Bear, Stearns & Co. Inc., Merrill Lynch, Pierce, Fenner &
Smith Incorporated and Smith Barney Inc. are acting as representatives (the
"Representatives"), have severally but not jointly agreed to purchase from ATS
the following respective numbers of shares of Class A Common Stock:

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
----------- ----------
<S> <C>
Credit Suisse First Boston Corporation...............................
BT Alex. Brown Incorporated..........................................
Lehman Brothers Inc. ................................................
Morgan Stanley & Co. Incorporated....................................
Bear, Stearns & Co. Inc. ............................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated....................................................
Smith Barney Inc. ...................................................
----------
Total.............................................................. 23,619,871
==========
</TABLE>

The Underwriting Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent and that the Underwriters will be
obligated to purchase all of the shares offered hereby (other than those
shares covered by the over-allotment option described below) if any are
purchased. The Underwriting Agreement provides that, in the event of a default
by an Underwriter, in certain circumstances the purchase commitments of non-
defaulting Underwriters may be increased or the Underwriting Agreement may be
terminated.

ATS has granted to the Underwriters an option, expiring at the close of
business on the 30th the day after the date of this Prospectus, to purchase an
aggregate of up to 2,361,987 additional shares of Class A Common Stock from
ATS at the public offering price less the underwriting discounts and
commissions, all as set forth on the cover page of this Prospectus. The
Underwriters may exercise such option only to cover over-allotments in the
sale of the shares of the Class A Common Stock. To the extent that the option
is exercised, each Underwriter will become obligated, subject to certain
conditions, to purchase approximately the same percentage of additional shares
of the Class A Common Stock as it was obligated to purchase pursuant to the
Underwriting Agreement.

ATS has been advised by the Representatives that the Underwriters propose to
offer the shares to the public at the public offering price set forth on the
cover page of this Prospectus and, through the Representatives, to certain
dealers at such price less a concession of $ . per share, and the
Underwriters and such dealers may allow a discount of $ . per share on sales
to certain other dealers. After the public offering, the public offering price
and concession and discount to dealers may be changed by the Representatives.

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ATS, its officers and directors, the Selling Stockholders and certain other
holders of Common Stock have agreed that, for a period of 120 days after the
date of this Prospectus, they will not publicly offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, or file with the
Commission a registration statement under the Securities Act relating to, any
additional shares of its Class A Common Stock, or securities convertible into
or exchangeable or exercisable for any shares of its Class A Common Stock, or
publicly disclose the intention to make any such offer, sale, pledge, disposal
or filing, without the prior written consent of Credit Suisse First Boston,
except with respect to private issuances of Class A Common Stock or securities
convertible into or exchangeable for Class A Common Stock in connection with
acquisitions if the holders thereof agree to be bound by the foregoing 120-day
restriction to the same extent as ATS, grants of employee stock options
pursuant to the terms of the Plan, issuances of Common Stock pursuant to the
exercise of stock options, or conversions of Class B Common Stock or Class C
Common Stock into Class A Common Stock.

American Tower Systems and the Selling Stockholders have agreed to indemnify
the Underwriters against certain liabilities, including civil liabilities
under the Securities Act, or contribute to payments which the Underwriters may
be required to make in respect thereof.

ATS intends to use more than 10% of the net proceeds from the sale of the
Class A Common Stock to redeem Interim Preferred Stock owned by Credit Suisse
First Boston Corporation, one of the Representatives of the Underwriters.
Accordingly, the offering is being made in compliance with the requirements of
Rule 2710(c)(8) of the National Association of Securities Dealers, Inc.
Conduct Rules. This rule provides generally that if more than 10% of the net
proceeds from the sale of stock, not including underwriting compensation, is
paid to the underwriters or their affiliates, the initial public offering
price of the stock may not be higher than that recommended by a "qualified
independent underwriter" meeting certain standards. Accordingly, Bear, Stearns
& Co. Inc. is assuming the responsibilities of acting as the qualified
independent underwriter in pricing the offering and conducting due diligence.
The initial public offering price of the Class A Common Stock set forth on the
cover page of this Prospectus is no higher than the price recommended by Bear,
Stearns & Co. Inc.

The Representatives, on behalf of the Underwriters, may engage in over-
allotment, stabilizing transactions, syndicate covering transactions, penalty
bids and "passive" market making in accordance with Regulation M under the
Exchange Act. Over-allotment involves syndicate sales in excess of the
offering size, which creates a syndicate short position. Stabilizing
transactions permit bids to purchase the underlying security so long as the
stabilizing bids do not exceed a specified maximum. Syndicate covering
transactions involve purchases of the Class A Common Stock in the open market
after the distribution has been completed in order to cover syndicate short
positions. Penalty bids permit the Representatives to reclaim a selling
concession from a syndicate member when the Class A Common Stock originally
sold by such syndicate member are purchased in a syndicate covering
transaction to cover syndicate short positions. In "passive" market making,
market makers in the Class A Common Stock who are Underwriters or prospective
underwriters may, subject to certain limitations, make bids for or purchases
of the Class A Common Stock until the time, if any, at which a stabilizing bid
is made. Such stabilizing transactions, syndicate covering transactions and
penalty bids may cause the price of the Securities to be higher than it would
otherwise be in the absence of such transactions. These transactions may be
effected on the New York Stock Exchange or otherwise and, if commenced, may be
discontinued at any time.

The Class A Common Stock is traded on the New York Stock Exchange under the
symbol "AMT".

NOTICE TO CANADIAN RESIDENTS

RESALE RESTRICTIONS

The distribution of the Class A Common Stock in Canada is being made only on
a private placement basis exempt from the requirement that ATS and the Selling
Stockholders prepare and file a prospectus with the securities, regulatory
authorities in each province where trades of the Class A Common Stock are
effected. Accordingly, any resale of the Class A Common Stock in Canada must
be made in accordance with applicable

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securities laws which will vary depending on the relevant jurisdiction, and
which may require resales to be made in accordance with available statutory
exemptions or pursuant to a discretionary exemption granted by the applicable
Canadian securities regulatory authority. Purchasers are advised to seek legal
advice prior to any resale of the Class A Common Stock.

REPRESENTATIONS OF PURCHASERS

Each purchaser of the Class A Common Stock in Canada who receives a purchase
confirmation will be deemed to represent to ATS, the Selling Stockholders and
the dealer from whom such purchase confirmation is received that (i) such
purchaser is entitled under applicable provincial securities laws to purchase
each Class A Common Stock without the benefit of a prospectus qualified under
such securities laws, (ii) where required by law, that such purchaser is
purchasing as principal and not as agent, and (iii) such purchaser has
reviewed the text above under "Resale Restrictions".

RIGHTS OF ACTION (ONTARIO PURCHASERS)

The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
section 32 of the Regulation under the Securities Act (Ontario). As a result,
Ontario purchasers must rely on other remedies that may be available,
including common law rights of action for damages or rescission or rights of
action under the civil liability provisions of the U.S. federal securities
laws.

ENFORCEMENT OF LEGAL RIGHTS

All of the issuer's directors and officers as well as the experts named
herein and the Selling Stockholders may be located outside of Canada and, as a
result, it may not be possible for Canadian purchasers to effect service of
process within Canada upon the issuer or such persons. All or a substantial
portion of the assets of the issuer and such persons may be located outside of
Canada and, as a result, it may not be possible to satisfy a judgment against
the issuer or such persons in Canada or to enforce a judgment obtained in
Canadian courts against such issuer or persons outside of Canada.

NOTICE TO BRITISH COLUMBIA RESIDENTS

A purchaser of the Class A Common Stock to whom the Securities Act (British
Columbia) applies is advised that such purchaser is required to file with the
British Columbia Securities Commission a report within ten days of the sale of
any Class A Common Stock acquired by such purchaser pursuant to this offering.
Such report must be in the form attached to British Columbia Securities
Commission Blanket Order BOR #95/17, a copy of which may be obtained from ATS.
Only one such report must be filed in respect of the Class A Common Stock
acquired on the same date and under the same prospectus exemption.

TAXATION AND ELIGIBILITY FOR INVESTMENT

Canadian purchasers of Class A Common Stock should consult their own legal
and tax advisors with respect to the tax consequences of an investment in the
Class A Common Stock in their particular circumstances and with respect to the
eligibility of the Class A Common Stock for investment by the purchaser under
relevant Canadian Legislation.

VALIDITY OF THE SHARES

The validity of the shares of Class A Common Stock offered hereby will be
passed upon for American Tower Systems by Sullivan & Worcester LLP, Boston,
Massachusetts, and for the Underwriters by Sullivan & Cromwell, New York, New
York. Norman A. Bikales, a member of the firm of Sullivan & Worcester LLP,
upon consummation of the CBS Merger, will be the owner of 9,000 shares of
Class A Common Stock and 41,490

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shares of Class B Common Stock and has an option to purchase 20,000 shares of
Class A Common Stock at $10.00 per share. Mr. Bikales and/or associates of
that firm serve as secretary or assistant secretaries of ATS and certain of
its subsidiaries.

EXPERTS

The following financial statements included in this Prospectus and the
related financial statement schedules included elsewhere in the Registration
Statement have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their reports, which are included herein, and have been so included
herein in reliance upon the reports of such firm given upon their authority as
experts in accounting and auditing:

(1) The consolidated financial statements and related financial statement
schedules of American Tower Systems Corporation as of December 31, 1997 and
1996, for the years ended December 31, 1997 and 1996, and for the period
July 17, 1995 (Incorporation) to December 31, 1995;

(2) The combined financial statements of Meridian Communications as of
December 31, 1995 and 1996 and for each of the two years then ended;

(3) The financial statements of Diablo Communications, Inc. as of
December 31, 1995 and 1996 and for each of the two years then ended;

(4) The financial statements of Gearon & Co., Inc as of December 31, 1996
and 1997 and for each of the two years then ended; and

(5) The financial statements of OPM-USA-INC. as of December 31, 1996 and
1997 and for each of the two years then ended.

The combined financial statements of net assets of MicroNet, Inc. and
Affiliates sold to ATS as of December 31, 1996 and October 31, 1997 and for
the year then ended December 31, 1996 and the ten months ended October 31,
1997 have been audited by Pressman Ciocca Smith LLP, independent certified
public accountants, as stated in their report appearing in this Prospectus and
have been so included in reliance upon the report of such firm as experts in
accounting and auditing.

The financial statements of Diablo Communications of Southern California,
Inc. for the years ended December 31, 1996 and 1997 and for the year ended
December 31, 1997 and for the period September 1, 1995 (inception) to December
31, 1996 have been audited by Rooney, Ida, Nolt & Ahern, independent auditors,
as stated in their report appearing in this Prospectus and have been so
included in reliance upon the report of such firm as experts.

The financial statements of Tucson Communications Company at December 31,
1997 and 1996, and for the years then ended, appearing in this Prospectus and
Registration Statement have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon appearing elsewhere herein, and
are included in reliance upon such report given upon the authority of such
firm as experts in accounting and auditing.

The consolidated financial statements of American Tower Corporation and
subsidiaries as of December 31, 1997 and 1996, and for each of the years in
the three year period ended December 31, 1997, have been included in this
Prospectus and Registration Statement in reliance upon the report of KPMG Peat
Marwick LLP, independent certified public accountants appearing herein, and
upon the authority of such firm as experts in accounting and auditing.

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AVAILABLE INFORMATION

American Tower Systems has filed with the Commission a Registration
Statement on Form S-1 (the "Registration Statement") under the Securities Act
with respect to the Class A Common Stock to be offered hereby. This Prospectus
does not contain all of the information set forth in the Registration
Statement and the exhibits and schedules thereto. For further information with
respect to American Tower Systems and the securities offered hereby, reference
is made to the Registration Statement and the exhibits and schedules filed
therewith. Statements contained in this Prospectus as to the contents of any
contract or any other document to which reference is made are not necessarily
complete, and in each instance reference is made to the copy of such contract
or other document filed as an exhibit to the Registration Statement, each such
statement being qualified in all respects by such reference. The Registration
Statement can be inspected without charge and copied at the prescribed rates
at the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549, at the Commission's Regional
Offices at Seven World Trade Center, 13th Floor, New York, New York 10048, and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
The Commission maintains a Web site; the address of such site is
http://www.sec.gov.

ATS is subject to the informational requirements of the Exchange Act and in
accordance therewith files reports, proxy statements and other information
with the Commission. Such reports, proxy statements and other information
filed by the Company can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Room 1024,
Judiciary Plaza, Washington, D.C. 20549, and at the Commission's Regional
Offices at Citicorp Center, 500 West Madison, Suite 1400, Chicago, Illinois
60661 and 7 World Trade Center, Suite 1300, New York, New York 10048. Copies
of such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Room 1024, Judiciary Plaza, Washington,
D.C. 20549, at prescribed rates. The Company's Class A Common Stock is listed
on the New York Stock Exchange, and such reports, proxy statements and certain
other information can also be inspected at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005.

82
<PAGE>

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
AMERICAN TOWER SYSTEMS CORPORATION AND SUBSIDIARIES
Independent Auditors' Report............................................ F-3
Consolidated Balance Sheets as of December 31, 1996 and 1997 and March
31, 1998 (unaudited)................................................... F-4
Consolidated Statements of Operations for the period from July 17, 1995
("Incorporation") to December 31, 1995 and the years ended December 31,
1996 and 1997 and three months ended March 31, 1997 and 1998
(unaudited)............................................................ F-5
Consolidated Statements of Stockholder's Equity for the period from July
17, 1995 ("Incorporation") to December 31, 1995 and the years ended
December 31, 1996 and 1997 and three months ended March 31, 1998
(unaudited)............................................................ F-6
Consolidated Statements of Cash Flows for the period from July 17, 1995
("Incorporation") to December 31, 1995 and the years ended December 31,
1996 and 1997 and three months ended March 31, 1997 and 1998
(unaudited)............................................................ F-7
Notes to Consolidated Financial Statements.............................. F-8
MICRONET, INC. AND AFFILIATES
Report of Independent Certified Public Accountants...................... F-26
Combined Statements of Net Assets Sold as of December 31, 1996 and
October 31, 1997....................................................... F-27
Combined Statements of Income Derived From Net Assets Sold for the year
ended December 31, 1996 and ten months ended October 31, 1997.......... F-28
Combined Statements of Cash Flows Derived from Net Assets Sold for the
year ended December 31, 1996 and ten months ended October 31, 1997..... F-29
Notes to Combined Financial Statements.................................. F-30
DIABLO COMMUNICATIONS, INC.
Independent Auditors' Report............................................ F-36
Balance Sheets as of December 31, 1995 and 1996 and September 30, 1997
(unaudited)............................................................ F-37
Statements of Income for the years ended December 31, 1995 and 1996 and
nine months ended September 30, 1996 and 1997 (unaudited).............. F-38
Statements of Stockholders' Equity for the years ended December 31, 1995
and 1996 and nine months ended September 30, 1997 (unaudited).......... F-39
Statements of Cash Flows for years ended December 31, 1995 and 1996 and
nine months ended September 30, 1996 and 1997 (unaudited).............. F-40
Notes to Financial Statements........................................... F-41
DIABLO COMMUNICATIONS OF SOUTHERN CALIFORNIA, INC.
Independent Auditors' Report............................................ F-45
Balance Sheets as of December 31, 1995 and 1996 and September 30, 1997
(unaudited)............................................................ F-46
Statements of Operations for the period from September 1, 1995
(inception) to December 31, 1995, year ended December 31, 1996, and
nine months ended September 30, 1996 and 1997 (unaudited).............. F-47
Statements of Stockholders' Equity for the period from September 1, 1995
(inception) to December 31, 1995, year ended December 31, 1996 and nine
months ended September 30, 1997 (unaudited)............................ F-48
Statements of Cash Flows for the period from September 1, 1995
(inception) to December 31, 1995, year ended December 31, 1996 and nine
months ended September 30, 1996 and 1997 (unaudited)................... F-49
Notes to Financial Statements........................................... F-50
MERIDIAN COMMUNICATIONS
Independent Auditors' Report............................................ F-55
Combined Balance Sheets as of December 31, 1995 and 1996 and June 30,
1997 (unaudited)........................................................ F-56
Combined Statements of Income for the years ended December 31, 1995 and
1996 and six months ended June 30, 1996 and 1997 (unaudited).......... F-57
</TABLE>

F-1
<PAGE>

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Combined Statements of Partners' Capital and Stockholder's Equity for
the years ended December 31, 1995 and 1996 and six months ended June
30, 1997 (unaudited)................................................. F-58
Combined Statements of Cash Flows for years ended December 31, 1995 and
1996 and six months ended June 30, 1996 and 1997 (unaudited)......... F-59
Notes to Combined Financial Statements................................. F-60
TUCSON COMMUNICATIONS COMPANY
Report of Independent Auditors......................................... F-65
Balance Sheets as of December 31, 1996 and 1997........................ F-66
Statements of Income for the years ended December 31, 1996 and 1997 ... F-67
Statements of Partners' Deficit for the years ended December 31, 1996
and 1997 .............................................................. F-68
Statements of Cash Flows for the years ended December 31, 1996 and
1997................................................................. F-69
Notes to Financial Statements.......................................... F-70
GEARON & CO., INC.
Independent Auditors' Report........................................... F-73
Balance Sheets as of December 31, 1996 and 1997........................ F-74
Statements of Operations for the years ended December 31, 1996 and
1997................................................................... F-75
Statements of Changes in Stockholders' Equity for the years ended De-
cember 31, 1996 and 1997............................................... F-76
Statements of Cash Flows for the years ended December 31, 1996 and
1997................................................................... F-77
Notes to Financial Statements.......................................... F-78
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
Independent Auditors' Report........................................... F-82
Consolidated Balance Sheets as of December 31, 1996 and 1997 and March
31, 1998 (unaudited)................................................... F-83
Consolidated Statements of Operations for the years ended December 31,
1995, 1996 and 1997 and three months ended March 31, 1997 and 1998
(unaudited).......................................................... F-84
Consolidated Statements of Stockholders' Equity for the years ended
December 31, 1995, 1996 and 1997 and three months ended March 31,
1998 (unaudited)..................................................... F-85
Consolidated Statements of Cash Flows for the years ended December 31,
1995, 1996 and 1997 and three months ended March 31, 1997 and 1998
(unaudited).......................................................... F-86
Notes to Consolidated Financial Statements............................. F-87
OPM-USA-INC.
Independent Auditors' Report........................................... F-97
Balance Sheets as of December 31, 1996 and 1997........................ F-98
Statements of Operations for the years ended December 31, 1996 and
1997.................................................................. F-99
Statements of Stockholders' Equity (Deficiency) for the years ended De-
cember 31, 1996 and 1997.............................................. F-100
Statements of Cash Flows for the years ended December 31, 1996 and
1997.................................................................. F-101
Notes to Financial Statements.......................................... F-102
</TABLE>

F-2
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Board of Directors ofAmerican Tower Systems Corporation:

We have audited the accompanying consolidated balance sheets of American
Tower Systems Corporation and subsidiaries (the "Company"), a wholly owned
subsidiary of American Radio Systems Corporation, as of December 31, 1997 and
1996 and the related consolidated statements of operations, stockholder's
equity and cash flows for the years ended December 31, 1997 and 1996 and the
period from July 17, 1995 (Incorporation) to December 31, 1995. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, such consolidated financial statements present fairly, in
all material respects, the consolidated financial position of the companies as
of December 31, 1997 and 1996, and the results of their operations and their
cash flows for the years ended December 31, 1997 and 1996 and the period from
Incorporation to December 31, 1995 in conformity with generally accepted
accounting principles.

/s/ Deloitte & Touche LLP

Deloitte & Touche LLP
Boston, Massachusetts

March 6, 1998 (except for
the sixth paragraph of Note
1 and the second paragraph
of Note 4, as to which the
dates are March 27, 1998)

F-3
<PAGE>

AMERICAN TOWER SYSTEMS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------
MARCH 31, 1998
1996 1997 (UNAUDITED)
----------- ------------ --------------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents.......... $ 2,373,360 $ 4,595,500 $ 6,799,598
Accounts receivable, net of allow-
ance for doubtful accounts of
$47,000, $125,000 and $355,000 in
1996, 1997 and 1998, respectively
.................................. 236,990 3,238,877 5,742,112
Unbilled receivables............... 3,028,378
Prepaid and other current assets... 79,657 789,677 1,336,825
Deferred income taxes.............. 62,560 62,560
----------- ------------ ------------
Total current assets............. 2,690,007 8,686,614 16,969,473
----------- ------------ ------------
PROPERTY AND EQUIPMENT, net.......... 19,709,523 117,617,776 156,827,010
UNALLOCATED PURCHASE PRICE, net...... 12,954,959 108,192,255 221,532,005
OTHER INTANGIBLE ASSETS, net......... 1,336,361 8,424,406 7,656,737
INVESTMENT IN AFFILIATE.............. 325,000 310,305 310,208
NOTES RECEIVABLE..................... 10,700,000 1,000,000
INTEREST RECEIVABLE--STOCKHOLDER
NOTES RECEIVABLE.................... 674,277
DEPOSITS AND OTHER LONG-TERM ASSETS.. 101,803 1,424,540 4,771,462
DEFERRED INCOME TAXES................ 123,272,646
----------- ------------ ------------
TOTAL................................ $37,117,653 $255,355,896 $533,013,818
=========== ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt.. $ 117,362 $ 110,391 $ 112,409
Accounts payable................... 1,058,822 3,738,230 2,581,420
Accrued expenses................... 715,322 4,492,064 9,417,069
Accrued interest................... 913,624 2,148,666
Unearned income.................... 252,789 1,752,248 2,556,715
Due to Parent (tax liability)...... 125,210,000
----------- ------------ ------------
Total current liabilities........ 2,144,295 11,006,557 142,026,279
----------- ------------ ------------
LONG-TERM DEBT....................... 4,417,896 90,066,269 157,037,420
DEFERRED INCOME TAXES................ 279,218 417,628
OTHER LONG-TERM LIABILITIES.......... 18,950 32,750 32,550
----------- ------------ ------------
Total long-term liabilities...... 4,716,064 90,516,647 157,069,970
----------- ------------ ------------
MINORITY INTEREST IN SUBSIDIARIES.... 528,928 625,652 600,240
----------- ------------ ------------
COMMITMENTS AND CONTINGENCIES (Note
5)
STOCKHOLDERS' EQUITY:
Preferred Stock; $0.01 par value;
20,000,000 shares authorized; no
shares issued or outstanding......
Common Stock; $.01 par value;
10,000,000 shares authorized,
3,000 shares issued and outstand-
ing in 1996....................... 30
Class A Common Stock; $.01 par val-
ue; 200,000,000 shares authorized;
29,667,883 and 36,351,266 shares
issued and outstanding, respec-
tively............................ 296,679 363,513
Class B Common Stock; $.01 par val-
ue; 50,000,000 shares authorized;
4,670,626 and 9,320,576 shares is-
sued and outstanding, respective-
ly................................ 46,706 93,206
Class C Common Stock; $.01 par val-
ue; 10,000,000 shares authorized;
1,295,518 and 3,295,518 shares is-
sued and outstanding, respective-
ly................................ 12,955 32,955
Notes receivable, due from stock-
holders........................... (49,375,000)
Additional paid-in capital......... 30,318,420 155,710,741 286,589,686
Accumulated deficit................ (590,084) (2,860,041) (4,387,031)
----------- ------------ ------------
Total stockholders' equity....... 29,728,366 153,207,040 233,317,329
----------- ------------ ------------
TOTAL................................ $37,117,653 $255,355,896 $533,013,818
=========== ============ ============
</TABLE>

See notes to consolidated financial statements.

F-4
<PAGE>

AMERICAN TOWER SYSTEMS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
PERIOD FROM
JULY 17, 1995
(INCORPORATION) PERIOD ENDED THREE MONTHS
TO DECEMBER 31, DECEMBER 31, ENDED MARCH 31,
--------------- ----------------------- ------------------------
1997 1998
1995 1996 1997 (UNAUDITED) (UNAUDITED)
--------------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
REVENUES:
Tower rental and
management (see Note
6 for related party
revenue)............. $ 162,933 $2,893,633 $13,223,093 $1,364,751 $ 9,492,616
Site acquisition
services.............. 2,122,547 5,275,021
Video, voice and data
transmission.......... 2,083,756 3,142,184
Other................. 186 3,245 79,071 918 15,367
---------- ---------- ----------- ---------- -----------
Total operating rev-
enues.............. 163,119 2,896,878 17,508,467 1,365,669 17,925,188
---------- ---------- ----------- ---------- -----------
OPERATING EXPENSES:
Operating expenses
excluding
depreciation and
amortization and
corporate general and
administrative
expenses:
Tower rental and
management.......... 59,417 1,362,284 6,080,273 537,535 4,899,329
Site acquisition
service............. 1,360,217 4,543,579
Video, voice and data
transmission........ 1,272,682 2,051,587
Depreciation and
amortization.......... 57,428 989,936 6,326,323 504,024 5,802,052
Corporate general and
administrative
expense.............. 230,109 830,248 1,536,263 280,097 541,220
---------- ---------- ----------- ---------- -----------
Total operating ex-
penses............. 346,954 3,182,468 16,575,758 1,321,656 17,837,767
---------- ---------- ----------- ---------- -----------
INCOME (LOSS) FROM OPER-
ATIONS................. (183,835) (285,590) 932,709 44,013 87,421
---------- ---------- ----------- ---------- -----------
OTHER INCOME (EXPENSE):
Interest expense...... (3,039,235) (95,504) (2,430,202)
Interest income and
other, net............ 36,204 235,023 24,872 864,946
Minority interest in
net earnings (loss)
of subsidiaries...... (184,897) (177,313) (80,374) (79,379)
---------- ---------- ----------- ---------- -----------
TOTAL OTHER EXPENSE..... (148,693) (2,981,525) (151,006) (1,644,635)
---------- ---------- ----------- ---------- -----------
LOSS BEFORE BENEFIT
(PROVISION) FOR INCOME
TAXES AND EXTRAORDINARY
LOSS .................. (183,835) (434,283) (2,048,816) (106,993) (1,557,214)
BENEFIT (PROVISION) FOR
INCOME TAXES........... 73,424 (45,390) 472,671 49,039 30,224
---------- ---------- ----------- ---------- -----------
LOSS BEFORE EXTRAORDI-
NARY LOSS.............. (110,411) (479,673) (1,576,145) (57,954) (1,526,990)
EXTRAORDINARY LOSS ON
EXTINGUISHMENT OF DEBT,
NET OF INCOME TAX BENE-
FIT OF $462,500........ (693,812)
---------- ---------- ----------- ---------- -----------
NET LOSS................ $ (110,411) $ (479,673) $(2,269,957) $ (57,954) $(1,526,990)
========== ========== =========== ========== ===========
BASIC AND DILUTED PRO
FORMA PER COMMON SHARE
AMOUNTS:
Loss before
extraordinary loss.... $ (0.03) $ (0.03)
Extraordinary loss.... (0.01)
----------- -----------
Net loss.............. $ (0.05) $ (0.03)
=========== ===========
PRO FORMA BASIC AND DI-
LUTED COMMON SHARES
OUTSTANDING............ 48,691,790 48,967,360
=========== ===========
</TABLE>

See notes to consolidated financial statements.

F-5
<PAGE>

AMERICAN TOWER SYSTEMS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

PERIOD FROM JULY 17, 1995 (INCORPORATION) TO DECEMBER 31, 1995, YEARS ENDED
DECEMBER 31, 1996 AND 1997 AND THREE MONTHS ENDED MARCH 31, 1998 (UNAUDITED)

<TABLE>
<CAPTION>
COMMON STOCK COMMON STOCK COMMON STOCK COMMON STOCK
------------------ -------------------- -------------------- --------------------
CLASS A CLASS B CLASS C
-------------------- -------------------- -------------------- NOTE RECEIVABLE,
OUTSTANDING OUTSTANDING OUTSTANDING OUTSTANDING DUE FROM
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT STOCKHOLDERS
----------- ------ ----------- -------- ----------- -------- ----------- -------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Issuance of com-
mon stock to par-
ent.............. 10
Contributions
from parent:
Cash............
Non-cash........
Cash transfers to
parent...........
Net loss.........
BALANCE, DECEM-
BER 31, 1995..... 10
Issuance of
common stock to
parent........... 2,990 $ 30
Contributions
from parent:
Cash............
Non-cash........
Transfers to par-
ent:
Cash............
Non-cash........
Net loss.........
------ ---- ------------
BALANCE, DECEM-
BER 31, 1996..... 3,000 30
Contributions
from parent:
Cash............
Non-cash........
Transfers to par-
ent:
Cash............
Non-cash........
Recapitalization
(Note 8)......... (3,000) (30) 29,667,883 $296,679 4,670,626 $ 46,706 1,295,518 $ 12,955
Net loss.........
------ ---- ---------- -------- --------- -------- --------- -------- ------------
BALANCE, DECEM-
BER 31, 1997..... -- -- 29,667,883 296,679 4,670,626 46,706 1,295,518 12,955
====== ==== ========== ======== ========= ======== ========= ======== ============
Contributions
from parent:
Cash............
Non-cash........
Cash transfers to
parent:..........
Issuance of com-
mon stock, net of
issuance costs of
$601,762 1,350,050 13,501 4,649,950 46,500 2,000,000 20,000 $(49,375,000)
Issuance of Class
A Common Stock
for Gearon Merger
................. 5,333,333 53,333
Net loss.........
------ ---- ---------- -------- --------- -------- --------- -------- ------------
BALANCE, MARCH
31, 1998 (Unau-
dited)........... -- $ -- 36,351,266 $363,513 9,320,576 $ 93,206 3,295,518 $32,955 $(49,375,000)
====== ==== ========== ======== ========= ======== ========= ======== ============
<CAPTION>
ADDITIONAL
PAID-IN ACCUMULATED
CAPITAL DEFICIT TOTAL
------------- ------------ -------------
<S> <C> <C> <C>
Issuance of com-
mon stock to par-
ent..............
Contributions
from parent:
Cash............ $ 242,215 $ 242,215
Non-cash........ 3,816,445 3,816,445
Cash transfers to
parent........... (179,426) (179,426)
Net loss......... $ (110,411) (110,411)
BALANCE, DECEM-
BER 31, 1995..... 3,879,234 (110,411) 3,768,823
Issuance of
common stock to
parent........... (30)
Contributions
from parent:
Cash............ 2,548,557 2,548,557
Non-cash........ 29,856,885 29,856,885
Transfers to par-
ent:
Cash............ (4,866,226) (4,866,226)
Non-cash........ (1,100,000) (1,100,000)
Net loss......... (479,673) (479,673)
------------- ------------ -------------
BALANCE, DECEM-
BER 31, 1996..... 30,318,420 (590,084) 29,728,366
Contributions
from parent:
Cash............ 143,073,631 143,073,631
Non-cash........ 50,000 50,000
Transfers to par-
ent:
Cash............ (16,650,000) (16,650,000)
Non-cash........ (725,000) (725,000)
Recapitalization
(Note 8)......... (356,310)
Net loss......... (2,269,957) (2,269,957)
------------- ------------ -------------
BALANCE, DECEM-
BER 31, 1997..... 155,710,741 (2,860,041) 153,207,040
============= ============ =============
Contributions
from parent:
Cash............ 28,684,995 28,684,995
Non-cash........ 4,729,047 4,729,047
Cash transfers to
parent:.......... (29,800,000) (29,800,000)
Issuance of com-
mon stock, net of
issuance costs of
$601,762 79,318,236 30,023,237
Issuance of Class
A Common Stock
for Gearon Merger
................. 47,946,667 48,000,000
Net loss......... (1,526,990) (1,526,990)
------------- ------------ -------------
BALANCE, MARCH
31, 1998 (Unau-
dited)........... $286,589,686 $(4,387,031) $233,317,329
============= ============ =============
</TABLE>

See notes to consolidated financial statements.

F-6
<PAGE>

AMERICAN TOWER SYSTEMS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
PERIOD FROM
JULY 17, 1995
(INCORPORATION) TO THREE MONTHS
DECEMBER 31, 1995 YEAR ENDED DECEMBER 31, ENDED MARCH 31,
------------------ ---------------------------- -------------------------
1997 1998
1995 1996 1997 (UNAUDITED) (UNAUDITED)
------------------ ------------- ------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net loss............... $(110,411) $ (479,673) $ (2,269,957) $ (57,954) $ (1,526,990)
Adjustments to
reconcile net loss to
cash provided by (used
in) operating
activities:
Depreciation and
amortization......... 57,428 989,936 6,326,323 504,024 5,802,052
Minority interest in
net earnings of
subsidiaries......... 184,897 177,313 80,374 79,379
Amortization of
deferred financing
costs................ 187,910 39,589 81,268
Provision for losses
on accounts
receivable........... 47,044 124,350 9,000 109,478
Extraordinary loss,
net.................. 693,812
Deferred income
taxes................ 108,715 146,529 (173,851) (30,274)
Changes in assets and
liabilities, net of
acquisitions:
Accounts
receivable......... (37,167) (246,867) (3,155,831) (52,178) (2,620,972)
Unbilled
receivables........ (3,028,378)
Prepaid and other
current assets..... (54,499) (226,814) 158,897 72,631 (212,809)
Accounts payable and
accrued expenses... 93,860 1,580,284 5,096,378 (169,015) (1,426,686)
Accrued interest.... 913,624 1,235,042
Unearned income..... 252,789 1,499,459 (36,353) (198,073)
Other long-term
liabilities........ 18,950 13,800 (200)
--------- ------------- ------------- ----------- ------------
Cash provided by (used
in) operating
activities........... (50,789) 2,229,261 9,912,607 216,267 (1,737,163)
--------- ------------- ------------- ----------- ------------
CASH FLOWS FROM
INVESTING ACTIVITIES:
Payments for purchase
of property and
equipment and
construction......... (20,614,412) (3,086,725) (12,690,475)
Payments for
acquisitions......... (184,075,851) (71,068,578)
Advances of notes
receivable........... (10,961,416) (6,000,000)
Repayment of notes
receivable........... 2,000,000
Deposits and other
long-term assets..... (1,131,247) (259,332) (4,076,296)
------------- ----------- ------------
Cash used for
investing
activities........... (216,782,926) (3,346,057) (91,835,349)
------------- ----------- ------------
CASH FLOWS FROM
FINANCING ACTIVITIES:
Borrowings under
credit facility...... 2,500,000 151,000,000 67,000,000
Repayment of credit
facility............. (65,000,000)
Borrowings under other
notes payable........ 231,115
Repayments of other
notes payable........ (106,697) (358,598) (28,521) (26,831)
Net proceeds from
private placement
equity offering...... 30,023,237
Contributions from
Parent............... 242,215 2,548,557 143,073,631 2,543,171 28,684,995
Cash transfers to
Parent............... (179,426) (4,866,226) (16,650,000) (29,800,000)
Distributions to
minority interest.... (174,650) (419,160) (104,790) (104,791)
Additions to deferred
financing costs...... (2,553,414)
--------- ------------- ------------- ----------- ------------
Cash provided by
financing
activities........... 62,789 132,099 209,092,459 2,409,860 95,776,610
--------- ------------- ------------- ----------- ------------
NET INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS............ 12,000 2,361,360 2,222,140 (719,930) 2,204,098
CASH AND CASH
EQUIVALENTS, BEGINNING
OF PERIOD.............. 12,000 2,373,360 2,373,360 4,595,500
--------- ------------- ------------- ----------- ------------
CASH AND CASH
EQUIVALENTS, END OF
PERIOD................. $ 12,000 $ 2,373,360 $ 4,595,500 $ 1,653,430 $ 6,799,598
========= ============= ============= =========== ============
</TABLE>
See notes to consolidated financial statements.

F-7
<PAGE>

AMERICAN TOWER SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1998 IS UNAUDITED)

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business and Corporate Structure--American Tower Systems Corporation and
subsidiaries (collectively, ATS or the Company) is a majority owned subsidiary
of American Radio Systems Corporation (ARS, American Radio or the Parent).
American Tower Systems (Delaware), Inc. (ATSI) is a wholly-owned subsidiary of
ATS and one of the two operating subsidiaries of ATS. American Tower systems,
L.P. (ATSLP), is an indirect wholly-owned subsidiary of ATS, which conducts
all of the business of ATS other than that conducted by ATSI. ATSI and ATSLP
are collectively referred to as the Operating Subsidiaries.

The Company was incorporated on July 17, 1995 (Incorporation) for the
purpose of acquiring, developing, marketing, managing and operating wireless
communications tower sites throughout the United States, for use by wireless
communications providers and television and radio broadcasters.

ATS's primary business is the leasing of antennae sites on multi-tenant
towers for a diverse range of wireless communications industries, including
personal communications services (PCS), cellular, paging, specialized mobile
radio, enhanced specialized mobile radio (ESMR) and fixed microwave, as well
as radio and television broadcasters. ATS also offers its customers a broad
range of network development services, including network design, site
acquisition, zoning and other regulatory approvals, site construction and
antennae installation. ATS intends to expand these services and to capitalize
on its relationships with its wireless customers through major built to suit
construction projects. ATS is also engaged in the video, voice and data
transmission business, which it currently conducts in the New York City to
Washington, D.C. corridor and in Texas.

As of December 31, 1997, the Company owned and/or operated approximately 670
wireless communication sites, principally in the Northeast and Mid-Atlantic
regions, Florida and California. As of March 31, 1998, the Company owned
and/or operated approximately 880 wireless communication sites.

Interim Financial Information--The unaudited financial statements for the
three months ended March 31, 1997 and 1998 are presented for comparative
purposes only and have been prepared on a basis substantially consistent with
that of the audited financial statements included herein. In the opinion of
management, such unaudited financial statements include all adjustments, which
are of a normal and recurring nature, considered necessary for a fair
presentation. Operating results for the three-month periods ended March 31,
1997 and 1998 are not necessarily indicative of the results that may be
expected for a full year.

CBS Merger--In September 1997, American Radio entered into a merger
agreement as amended and restated in December 1997, as amended (the CBS Merger
Agreement) pursuant to which a subsidiary of CBS will be merged (the CBS
Merger) into American Radio. As a consequence of the consummation of the CBS
Merger, all of the shares of ATS owned by ARS will be distributed to ARS
common stockholders and holders of options to acquire ARS Common Stock or upon
conversion of shares of ARS 7% Convertible Exchangeable Preferred Stock (the
Convertible Preferred Stock). As a consequence of the CBS Merger, ATS will
cease to be a subsidiary of, or to be otherwise affiliated with, American
Radio and will operate as an independent publicly traded company. Pursuant to
the provisions of the CBS Merger Agreement, ATS will enter into an agreement
(the ARS-ATS Separation Agreement) with CBS and ARS providing for, among other
things, the allocation of certain tax liabilities to ATS, certain closing date
adjustments relating to ARS, the lease to ARS by ATS of space on certain
towers previously owned by ARS and transferred to ATS, the orderly separation
of ARS and ATS, and certain indemnification obligations (including with
respect to securities law matters) of ATS.

ATS's principal obligation is to reimburse CBS on a "make-whole" (after tax)
basis for the tax liabilities to be incurred by ARS in excess of $20.0 million
attributable to the distribution of the Common Stock to the

F-8
<PAGE>

AMERICAN TOWER SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1998 IS UNAUDITED)

ARS security holders and certain related transactions. In light of the
significant increase in the trading levels of the Class A Common Stock, ATS
and CBS have agreed that ARS will treat the distribution on its tax return on
a more conservative basis than originally contemplated in order to avoid the
possibility of significant interest and penalties for which ATS would be
responsible. Based on an estimate of "fair market value" using available
information as of March 27, 1998 of $16.00 per share of ATS common stock, the
estimated CBS Merger Tax Liability is approximately $173.0 million of which
approximately $20.0 million will be borne by ARS and the remaining obligation
(approximately $153.0 million) will be paid by ATS. This estimate will
increase or decrease depending on changes in the "fair market value" of ATS
common stock between March 27, 1998 and the closing date of the CBS Merger.
See Note 12 for recent developments and estimates of such liability as of
dates subsequent to March 27, 1998. The estimates described above are based on
a number of assumptions and interpretations of various applicable income tax
rules and are subject to change.

In connection with an inter-corporate taxable transfer of assets entered
into in January 1998 by ATS in contemplation of the separation of ATS and ARS,
a portion of the tax with respect to which ATS is obligated to indemnify CBS
was incurred. Such transfer resulted in an increase in the tax bases of ATS's
assets of approximately $330.0 million. ATS will have potential depreciation
and amortization deductions over the next 15 years of $22.0 million per year
and recorded a deferred tax asset and corresponding liability due to ARS of
approximately $125.0 million to reflect these transactions.

The CBS Merger has been approved by the stockholders of ARS who held
sufficient voting power to approve such action. Consummation of the CBS Merger
is subject to, among other things, the approval by the Federal Communications
Commission (FCC) of the transfer of control of ARS's FCC licenses with respect
to its radio stations to CBS. Subject to the satisfaction of such conditions,
the CBS Merger is expected to be consummated in the Spring of 1998.

The foregoing is a description of the rights and obligations of ARS and ATS
in the event the CBS Merger is consummated. Although the ARS-ATS Separation
Agreement will be effective and operational if the merger of a subsidiary of
ARS in ARS (the Tower Merger) is consummated, in the event the CBS Merger is
not subsequently consummated, ARS and ATS have reserved the right to alter the
terms of the agreement to provide for a sharing of the rights and obligations
in a manner that may be more or less favorable to ATS. Because ARS and ATS
believe that the CBS Merger will be consummated, no determination has been
made of what the rights and obligations of ARS and ATS should be in the event
it were not.

Principles of Consolidation and Basis of Presentation--The accompanying
consolidated financial statements include the accounts of the Company and its
subsidiaries. All significant intercompany accounts and transactions have been
eliminated. Investments in affiliates, where ATS owns more than 20 percent of
the voting power of the affiliate but not in excess of 50 percent, are
accounted for using the equity method. Separate financial information
regarding equity method investees is not significant. The Company also
consolidates its 50.1% interest and its 70.0% interest in two other tower
communications limited liability companies, with the other members'
investments reflected as minority interest in subsidiaries in the accompanying
consolidated financial statements.

Through March 31, 1998, ATS effectively operated as a stand-alone entity,
with its own corporate staff and headquarters, and received minimal assistance
from personnel of the Parent. Accordingly, the accompanying consolidated
financial statements do not include any cost allocations from the Parent.
However, the consolidated financial statements may not reflect the results of
operations or financial position of ATS had it been an independent public
company during the periods presented.

F-9
<PAGE>

AMERICAN TOWER SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1998 IS UNAUDITED)

Use of Estimates--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results may differ from those estimates, and
such differences could be material to the consolidated financial statements.

Revenue Recognition--Tower revenues are recognized when earned. Escalation
clauses and other incentives present in tower lease agreements with the
Company's customers are recognized on a straight-line basis over the term of
the leases. Site acquisition and video, voice and data transmission revenues
are recognized as such services are provided. Amounts billed or received prior
to services being performed are deferred until such time as the revenue is
earned.

Corporate General and Administrative Expense--Corporate general and
administrative expense consists of corporate overhead costs not specifically
allocable to any of the Company's individual business properties.

Concentration of Credit Risk--The Company extends credit to customers on an
unsecured basis in the normal course of business. The Company has policies
governing the extension of credit and collection of amounts due from
customers.

Derivative Financial Instruments--The Company uses derivative financial
instruments as a means of managing interest-rate risk associated with current
debt or anticipated debt transactions that have a high probability of being
executed. The Company's interest rate protection agreements generally consist
of interest rate swap agreements and interest rate cap agreements. These
instruments are matched with either fixed or variable rate debt, and payments
thereon are recorded on a settlement basis as an adjustment to interest
expense. Premiums paid to purchase interest rate cap agreements are amortized
as an adjustment of interest expense over the life of the contract. Derivative
financial instruments are not held for trading purposes. (See Note 4).

Cash and Cash Equivalents--Cash and cash equivalents include cash on hand,
demand deposits and short-term investments with remaining maturities when
purchased of three months or less.

Property and Equipment and Unallocated Purchase Price--Property and
equipment are recorded at cost, or at estimated fair value in the case of
acquired properties. Cost includes expenditures for communications sites and
related assets and the net amount of interest cost associated with significant
capital additions. Approximately $120,000, $458,000 and $319,000 of interest
was capitalized for the years ended December 31, 1996 and 1997 and the three
months ended March 31, 1998, respectively. No interest was capitalized for the
three months ended March 31, 1997. Depreciation is provided using the
straight-line method over estimated useful lives ranging from three to fifteen
years.

The excess of purchase price over the estimated fair value of net assets
acquired has been preliminarily recorded as unallocated purchase price and is
being amortized over an estimated aggregate useful life of fifteen years using
the straight-line method. Accumulated amortization aggregated approximately
$356,000, $3,726,000 and $7,025,000 at December 31, 1996 and 1997 and March
31, 1998, respectively. The consolidated financial statements reflect the
preliminary allocation of certain purchase prices as the appraisals for some
acquisitions have not yet been finalized. The Company is currently conducting
studies to determine the purchase price allocations and expects that upon
final allocation, the average estimated useful life will approximate fifteen
years. The final allocation of purchase price is not expected to have a
material effect on the Company's consolidated results of operations, liquidity
or financial position.

F-10
<PAGE>

AMERICAN TOWER SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1998 IS UNAUDITED)

Intangible Assets--Intangible assets are being amortized on a straight-line
basis over their estimated useful lives, ranging from five to eight years.
Other intangible assets consist principally of a noncompetition agreement,
deferred financing costs and deferred acquisition costs. Deferred private
placement fees were reclassified to additional paid-in capital upon
consummation of the ATS Stock Purchase Agreement and Tower Separation fees
will be reclassified to additional paid-in capital upon consummation of the
related transaction. (See Note 3).

Notes Receivable--In connection with the acquisition of OPM-USA-INC. (OPM)
and the acquisition of Gearon & Co. Inc. (Gearon) described in Note 9, the
Company entered into certain note agreements prior to consummation of these
acquisitions. The Company agreed to advance OPM an amount not to exceed
$37.0 million, of which approximately $5.7 million (excluding accrued
interest) was advanced as of December 31, 1997. The note bore interest at
prime rate plus 3%, was unsecured and was settled upon closing of the OPM
acquisition.

The Company agreed to advance Gearon an amount not to exceed $10.0 million
prior to closing, of which the maximum amount was advanced. The note bore
interest at approximately 7.25%, was unsecured and was settled upon closing of
the Gearon acquisition.

Income Taxes--Deferred taxes are provided to reflect temporary differences
in basis between book and tax assets and liabilities, and net operating loss
carryforwards. Deferred tax assets and liabilities are measured using
currently enacted tax rates. The Company provides for income taxes at the end
of each interim period based on the estimated effective tax rate for the full
fiscal year for each tax reporting corporate entity. Cumulative adjustments to
the tax benefit (provision) are recorded in the interim period in which a
change in the estimated annual effective rate is determined. Through January
1998, the Company participated in a tax sharing agreement with ARS. The tax
sharing agreement was terminated in connection with the corporate
restructuring, pursuant to which the Company and its subsidiaries will now
prepare and file income tax returns on a separate consolidated basis. Under
the tax sharing agreement, there were no significant differences between the
tax benefit (provision) recorded and the amounts measured on a separate return
basis. (See Note 7).

Pro Forma Loss Per Common Share--Pro forma loss per common share is computed
using the number of shares of common stock expected to be outstanding upon
consummation of the CBS Merger. These shares include shares issued pursuant to
the stock purchase agreement described in Note 8 and the Gearon acquisition
described in Note 11 and also includes shares of ATS common stock issuable
upon exercise of ARS options (each ARS option in effect represents the right
to receive $44 in cash and one ATS share; such exercise is expected to occur
upon closing). Shares issuable upon exercise of ATS and ATSI options have been
excluded from the computation as the effect is anti-dilutive. Had ATS and ATSI
options been included in the computation, shares for diluted computation would
have been increased by approximately 7.0 million.

Impairment of Long-Lived Assets--Recoverability of long-lived assets is
determined by periodically comparing the forecasted undiscounted net cash
flows of the operations to which the assets relate to the carrying amount,
including associated intangible assets of such operations. Through March 31,
1998, no impairments requiring adjustment have occurred.

Stock-Based Compensation--Compensation related to equity grants or awards to
employees is measured using the intrinsic value method prescribed by
Accounting Principles Board Opinion No. 25. (See Note 8).

F-11
<PAGE>

AMERICAN TOWER SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1998 IS UNAUDITED)

Fair Value of Financial Instruments--The Company believes that the carrying
value of all financial instruments, excluding the interest rate protection
agreements, is a reasonable estimate of fair value as of December 31, 1996 and
1997 and March 31, 1998. The fair value of the interest rate protection
agreements are obtained from independent market quotes. These values represent
the amount the Company would receive or pay to terminate the agreements taking
into consideration current market interest rates. The Company would expect to
pay approximately $97,000 and $90,000 to settle these agreements at December
31, 1997 and March 31, 1998, respectively. There were no interest rate
protection agreements at December 31, 1996. (See Note 4).

Retirement Plan--Employees of the Company are eligible for participation in
a 401(k) plan sponsored by ARS, subject to certain minimum age and length-of-
employment requirements. Administrative expenses of the plan are borne by ARS
and are not significant to ATS. Under the plan, the Company matches 30% of the
participants' contributions up to 5% of compensation. The Company contributed
approximately $6,000, $16,800, $3,900 and $2,100 for the years ended December
31, 1996 and 1997 and the three months ended March 31, 1997 and 1998,
respectively. The Company's contributions for the period from Incorporation to
December 31, 1995 were not material.

Recent Accounting Pronouncements--In June 1997, the Financial Accounting
Standards Board (FASB) issued Statement of Financial Accounting Standards
(FAS) No. 130, "Reporting Comprehensive Income," which became effective for
the Company for periods beginning after December 15, 1997. FAS No. 130
establishes standards for reporting and displaying comprehensive income and
its components (revenues, expenses, gains, and losses) in a full set of
general purpose financial statements. FAS No. 130 requires that a company (a)
classify items of other comprehensive income by their nature in a financial
statement and (b) display the accumulated balance of other comprehensive
income separately from retained earnings and additional paid-in-capital in the
equity section of the balance sheet. Reclassification of financial statements
for earlier periods provided for comparative purposes is required. The Company
has adopted this statement in the first quarter of 1998. Comprehensive income
does not differ from net income.

In June 1997, the FASB released FAS No. 131 "Disclosures about Segments of
an Enterprise and Related Information" (FAS 131). FAS 131 establishes
standards for the Company for reporting information about the operating
segments in its annual report and interim reports. ATS will adopt this
standard for its full year 1998 financial information.

Reclassifications--Certain reclassifications have been made to the 1995,
1996 and 1997 financial statements to conform with the 1998 presentation.

F-12
<PAGE>

AMERICAN TOWER SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1998 IS UNAUDITED)

2. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------- MARCH 31,
1996 1997 1998
----------- ------------ ------------
<S> <C> <C> <C>
Land and improvements................ $ 4,081,011 $ 17,955,568 $ 20,125,743
Buildings and improvements........... 17,731,874 27,018,019
Towers............................... 11,473,259 48,315,930 70,508,844
Technical equipment.................. 53,124 3,624,239 4,091,430
Transmitter equipment................ 13,550 18,211,996 18,381,479
Office equipment, furniture, fixtures
and other equipment................. 317,025 4,076,212 5,400,115
Construction in progress............. 4,276,410 10,641,639 16,840,669
----------- ------------ ------------
Total............................ 20,214,379 120,557,458 162,366,299
Less accumulated depreciation and am-
ortization.......................... (504,856) (2,939,682) (5,539,289)
----------- ------------ ------------
Property and equipment, net.......... $19,709,523 $117,617,776 $156,827,010
=========== ============ ============
</TABLE>

3. OTHER INTANGIBLE ASSETS

Other intangible assets consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------- MARCH 31,
1996 1997 1998
---------- ---------- -----------
<S> <C> <C> <C>
Non-compete agreement...................... $5,530,000 $ 5,530,000
Deferred financing costs................... $1,255,474 2,519,312 2,519,312
Deferred acquisition costs................. 93,965 438,238 446,603
Deferred private placement fees............ 546,023
Other...................................... 100,923 228,680
---------- ---------- -----------
Total................................... 1,349,439 9,134,496 8,724,595
Less accumulated amortization.............. (13,078) (710,090) (1,067,858)
---------- ---------- -----------
Other intangible assets, net............... $1,336,361 $8,424,406 $ 7,656,737
========== ========== ===========
</TABLE>

4. FINANCING ARRANGEMENTS

Outstanding amounts under the Company's long-term financing arrangements
consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------- MARCH 31,
1996 1997 1998
---------- ----------- ------------
<S> <C> <C> <C>
Loan Agreement........................... $2,500,000 $88,500,000 155,500,000
Note payable--other...................... 1,557,701 1,466,854 1,442,983
Other obligations........................ 477,557 209,806 206,846
---------- ----------- ------------
Total.................................... 4,535,258 90,176,660 157,149,829
Less current portion..................... (117,362) (110,391) (112,409)
---------- ----------- ------------
Long-term debt........................... $4,417,896 $90,066,269 $157,037,420
========== =========== ============
</TABLE>

Loan Agreements--In October 1997, ATSI entered into a new loan agreement
with a syndicate of banks (the Loan Agreement), which replaced the previously
existing credit agreement. All amounts outstanding under the previous
agreement were repaid with proceeds from the Loan Agreement. In connection
with the inter-

F-13
<PAGE>

AMERICAN TOWER SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1998 IS UNAUDITED)

corporate transfer of assets described in Note 1, the Loan Agreement was
amended in January 1998 to make the Operating Subsidiaries jointly and
severally liable as co-borrowers. The following discussion, with the exception
of the information regarding interest rates and availability under the
agreements, is based on the terms and conditions of the Loan Agreement.
Collectively, the previous loan agreement and the 1997 Loan Agreement (as
amended and restated on December 31, 1997, in January 1998 and March 27, 1998)
are referred to as the Loan Agreements.

The Loan Agreement provides the Operating Subsidiaries with a $250.0 million
loan commitment based on the maintenance of certain operational ratios, and an
additional $150.0 million loan at the discretion of the Operating
Subsidiaries. The Loan Agreement may be borrowed, repaid and reborrowed
without reducing the availability until June 2005 except as specified in the
Loan Agreement; thereafter, availability decreases in an amount equal to 50%
of excess cash flow, as defined in the Loan Agreement, for the fiscal year
immediately preceding the calculation date. In addition, the Loan Agreement
requires commitment reductions in the event of sale of ATSI's common stock or
debt instruments, and/or permitted asset sales, as defined in the Loan
Agreement.

Outstanding amounts under the Loan Agreements bear interest at either LIBOR
(5.78%, 5.90% and 5.69% as of December 31, 1996 and 1997 and March 31, 1998,
respectively) plus 1.0% to 2.25% or Base Rate, as defined in the Loan
Agreements, plus 0.00% to 1.00%. The spread over LIBOR and the Base Rate
varies from time to time, depending upon ATSI's financial leverage. Under
certain circumstances, ATSI may request that rates be fixed or capped. For the
years ended December 31, 1996 and 1997 and the three months ended March 31,
1998, the weighted average interest rate of the Loan Agreements was 8.75%,
7.4% and 7.34%, respectively.

There was $62.5 million, $32.7 million and $108.5 million available under
the Loan Agreements at December 31, 1996 and 1997 and March 31, 1998,
respectively. ATSI pays quarterly commitment fees ranging from .375% to .50%,
based on ATSI's financial leverage and the unused portion of the aggregated
commitment. Commitment fees paid related to the Loan Agreements aggregated
approximately $24,000, $416,000 and $81,000 for the years ended December 31,
1996 and 1997 and the three months ended March 31, 1997, respectively. No
commitment fees were paid during the three months ended March 31, 1998.

The Loan Agreement contains certain financial and operational covenants and
other restrictions with which ATSI must comply, whether or not any borrowings
are outstanding, including among others, maintenance of certain financial
ratios, limitations on acquisitions, additional indebtedness and capital
expenditures, as well as restrictions on cash distributions unless certain
financial tests are met, and the use of borrowings. The obligations of the
Operating Subsidiaries under the Loan Agreement are collateralized by a first
priority security interest in substantially all of the assets of the Operating
Subsidiaries. ATS and its subsidiaries pledged all of the stock and equity
interests of all Restricted Subsidiaries (including the Operating
Subsidiaries) to the banks as security for the Operating Subsidiaries'
obligations under the Loan Agreement. ATS is in the process of negotiating an
amended and restated loan agreement with its senior lenders, pursuant to which
the Company expects that the existing maximum borrowing will be increased from
$400.0 million to $900.0 million, subject to compliance with certain financial
ratios, and ATS (the Parent) will be able to borrow an additional $150.0
million. In connection with the refinancing, the Company expects to recognize
an extraordinary loss of approximately $1.4 million, net of a tax benefit of
$0.9 million, during the second quarter of 1998. (See Note 12).

Following the closing of the Loan Agreement in October 1997, ATSI incurred
an extraordinary loss of approximately $1,156,000 (approximately $694,000 net
of the applicable income tax benefit) representing the write-off of deferred
financing fees associated with the previous agreement.

Derivative Positions--Under the terms of the Loan Agreement, ATSI is
required, under certain conditions, to enter into interest rate protection
agreements. There were no such agreements outstanding at December 31,

F-14
<PAGE>

AMERICAN TOWER SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1998 IS UNAUDITED)

1996. As of December 31, 1997 and March 31, 1998, ATSI maintained a swap
agreement, expiring in January 2001, under which the interest rate is fixed
with respect to $7.3 million of notional principal amount at approximately
6.4%. ATSI also maintained two cap agreements; one expiring in July 2000,
under which the interest rate is fixed with respect to $21.6 million of
notional principal amount at approximately 9.5%, and one expiring in November
1999, under which the interest rate is fixed with respect to $7.0 million of
notional principal amount at approximately 8.5%. In January 1998, ATS entered
into a cap agreement expiring in January 2000, under which the interest rate
is fixed with respect $21.5 million of notional principal amount at
approximately 8.5%. ATSI's exposure under these agreements is limited to the
impact of variable interest rate fluctuations and the periodic settlement of
amounts due under these agreements if the other parties fail to perform.

Note Payable--Other--A limited liability company, which is under majority
control of the Company, has a note secured by the minority shareholder's
interest in the limited liability company. Interest rates under this note are
determined, at the option of the limited liability company, at either the
Floating Rate (as defined in the note agreement) or the Federal Home Loan
BankBoston rate plus 2.25%. As of December 31, 1996 and 1997 and March 31,
1998, the effective interest rate on borrowings under this note was 8.02%. The
note is payable in equal monthly principal payments with interest through
2006.

Other Obligations--In connection with various acquisitions, the Company
assumed certain long-term obligations of the acquired entities. Substantially
all of these obligations were repaid during 1997, with the remaining unpaid
obligation payable in monthly installments through 2014.

Future principal payments required under the Company's financing
arrangements at December 31, 1997 are approximately:

<TABLE>
<S> <C>
Year Ending:
1998............................................................. $ 110,000
1999............................................................. 119,000
2000............................................................. 128,000
2001............................................................. 137,000
2002............................................................. 148,000
Thereafter....................................................... 89,535,000
-----------
Total.......................................................... $90,177,000
===========
</TABLE>

5. COMMITMENTS AND CONTINGENCIES

Lease Obligations--The Company leases space for its existing offices in
Florida, California, Pennsylvania and Virginia, space on various
communications towers and land under operating leases that expire over various
terms. The Company also subleases space on communications towers under
substantially the same terms and conditions, including cancellation rights, as
those found in its own lease contracts. Most leases allow cancellation at will
or under certain technical circumstances. Many of the leases also contain
renewal options with specified increases in lease payments upon exercise of
the renewal option.

F-15
<PAGE>

AMERICAN TOWER SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1998 IS UNAUDITED)

In connection with the CBS Merger described in Note 1, ATS will assume
certain lease obligations with respect to ARS's corporate headquarters in
Boston, Massachusetts. Future minimum rental payments under noncancelable
leases in effect at December 31, 1997, excluding the assumption of the ARS
lease obligations, are approximately as follows:

<TABLE>
<S> <C>
Year Ending:
1998............................................................. $ 3,996,000
1999............................................................. 3,508,000
2000............................................................. 3,213,000
2001............................................................. 2,706,000
2002............................................................. 1,992,000
Thereafter....................................................... 10,373,000
-----------
Total.......................................................... $25,788,000
===========
</TABLE>

Aggregate rent expense under operating leases for the period ended December
31, 1995, the years ended December 31, 1996 and 1997 and the three months
ended March 31, 1997 and 1998 approximated $5,000, $420,000, $2,110,000,
$195,000 and $1,813,000 respectively.

Customer Leases--The Company leases space on its various tower properties
(both owned and managed) to customers which typically are for set periods of
time, although some leases are cancellable at the customers' option and others
are automatically renewed and have no fixed term. Long-term leases typically
contain provisions for renewals and specified rent increases over the lease
term.

Future minimum rental receipts expected to be received from customers under
noncancelable lease agreements in effect at December 31, 1997 are
approximately as follows:

<TABLE>
<S> <C>
Year Ending:
1998............................................................. $21,017,000
1999............................................................. 16,899,000
2000............................................................. 14,691,000
2001............................................................. 12,369,000
2002............................................................. 8,128,000
Thereafter....................................................... 26,892,000
-----------
Total.......................................................... $99,996,000
===========
</TABLE>

Tower rental revenues under the Company's sub-leases approximated $468,000,
$978,000, $195,000 and $262,000 for the years ended December 31, 1996 and 1997
and the three months ended March 31, 1997 and 1998, respectively.

Acquisition Commitments--See Notes 9 and 11 for information with respect to
acquisitions and related commitments.

CBS Merger--(See Notes 1 and 12 for recent developments).

Litigation--The Company periodically becomes involved in various claims and
lawsuits that are incidental to its business. In the opinion of management,
there are no matters currently pending which would, in the event of an adverse
outcome, have a material impact on the Company's consolidated financial
position, the results of operations or liquidity.

F-16
<PAGE>

AMERICAN TOWER SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1998 IS UNAUDITED)

6. RELATED PARTY TRANSACTIONS

The Company received revenues of approximately $70,000, $389,000, $81,000
and $326,000 from ARS for tower rentals at Company-owned sites for the years
ended December 31, 1996 and 1997 and the three months ended March 31, 1997 and
1998, respectively.

ARS has contributed substantially all of the Company's capitalization and
had funded substantially all of the 1996 acquisitions and certain 1997 and
1998 acquisitions described in Note 9.

In January 1998, ARS contributed certain tower sites to the Company (See
Note 9).

In January 1998, the Company consummated the transactions contemplated by a
stock purchase agreement with certain related parties. (See Note 8).

In December 1997, ARS contributed a tower site and related assets in West
Palm Beach, Florida to the Company at ARS's book value, which approximated
$50,000.

In January 1996, ARS contributed a tract of undeveloped land of
approximately two acres to the Company. The transfer was recorded at ARS's
book value of approximately $425,000.

In March 1996, ARS contributed approximately 200 acres of undeveloped land
to the Company. The transfer was recorded at ARS's book value of approximately
$2.3 million.

In November 1996, the Company transferred a tract of land to ARS. The
transfer was recorded at ATS's book value of approximately $1.1 million.

In December 1996, ARS contributed a tower site and related assets in
Peabody, Massachusetts to the Company at ARS's book value, which aggregated
approximately $1.1 million.

In December 1996, ARS contributed a tower site and related assets located in
Philadelphia, Pennsylvania, to the Company. These assets were contributed at
their initial estimated fair value of approximately $1.5 million, based on a
preliminary appraisal. In June 1997, the fair value of the tower site and
related assets was determined to be approximately $775,000 based on a final
independent appraisal. The net book value carried by ATS was adjusted by
approximately $725,000 to reflect the change in estimate. This change in
estimate did not have a material effect on the consolidated financial position
or the results of operations of ATS.

7. INCOME TAXES

Effective October 15, 1996, the Company entered into a tax sharing agreement
with ARS. In accordance with this agreement, the Company's share of the
consolidated federal income tax benefit (liability) is calculated as a portion
of ARS's consolidated income tax benefit (liability). Any income tax benefit
(provision) attributable to the Company is payable to (due from) ARS. The
Company's reported provision or benefit is not significantly different from
what would have been recorded on a separate return basis. The tax sharing
agreement was terminated in connection with the corporate restructuring
described in Note 1, pursuant to which the Company will now prepare and file
income tax returns on a separate company basis.

F-17
<PAGE>

AMERICAN TOWER SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1998 IS UNAUDITED)

The income tax benefit (provision) was comprised of the following:

<TABLE>
<CAPTION>
PERIOD ENDED DECEMBER 31,
---------------------------
1995 1996 1997
------- -------- ---------
<S> <C> <C> <C>
Current:
Federal....................................... $62,503 $ 53,907 $ 444,236
State......................................... 10,921 9,418 174,964
Deferred:
Federal....................................... (92,547) (125,545)
State......................................... (16,168) (20,984)
------- -------- ---------
Income tax benefit (provision).................. $73,424 $(45,390) $ 472,671
======= ======== =========
</TABLE>

A reconciliation between the U.S. statutory rate and the effective rate was
as follows for the periods presented:

<TABLE>
<CAPTION>
PERIOD ENDED
DECEMBER 31,
------------------
1995 1996 1997
---- ---- ----
<S> <C> <C> <C>
Statutory tax rate...................................... (34)% (34)% (34)%
State taxes, net of federal benefit..................... (6) (6) (6)
Nondeductible intangible amortization................... 49 17
Other................................................... 1
--- --- ---
Effective tax rate...................................... (40)% 10 % (23)%
=== === ===
</TABLE>

Significant components of the Company's deferred tax assets and liabilities
were composed of the following as of December 31:

<TABLE>
<CAPTION>
1996 1997
--------- ---------
<S> <C> <C>
Assets:
Allowances for financial reporting purposes which
are currently nondeductible--current............... $ 62,560
Net operating loss carryforwards.................... $ 2,071
Valuation allowances................................ (2,071)
Liabilities:
Property and equipment and intangible assets........ (168,125) (417,628)
Partnership investments............................. (77,648)
Long-term rental agreements......................... (33,445)
--------- ---------
Net deferred tax liabilities......................... $(279,218) $(355,068)
========= =========
</TABLE>

8. STOCKHOLDERS' EQUITY

Recapitalization--In November 1997, the Company restated its certificate of
incorporation to increase the aggregate number of shares of all classes of
stock which it is authorized to issue to 280,000,000 shares as follows:
20,000,000 shares of preferred stock $.01 par value per share, 260,000,000
shares of common stock $.01 par value per share, of which 200,000,000 is Class
A, 50,000,000 is Class B and 10,000,000 is Class C. The Class A and B entitles
the holder to one and ten votes, respectively, per share. The Class C is non-
voting.

In addition, at that time, the Company effected a recapitalization, pursuant
to which each share of the Company's existing common stock was cancelled and
the Company was recapitalized with 29,667,883 shares of Class A common stock,
4,670,626 shares of Class B common stock and 1,295,518 shares of Class C
common stock.

F-18
<PAGE>

AMERICAN TOWER SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1998 IS UNAUDITED)

ATS Stock Purchase Agreement--On January 22, 1998, the Company consummated
the transactions contemplated by the stock purchase agreement (the ATS Stock
Purchase Agreement), dated as of January 8, 1998, with Steven B. Dodge,
Chairman of the Board, President and Chief Executive Officer of ARS and ATS,
and certain other officers and directors of ARS (or their affiliates or family
members or family trusts), pursuant to which those persons purchased
8.0 million shares of ATS Common Stock at a purchase price of $10.00 per share
for an aggregate purchase price of $80.0 million, including 4.0 million shares
by Mr. Dodge for $40.0 million. Payment of the purchase price was in the form
of cash aggregating approximately $30.6 million and in the form of notes
aggregating approximately $49.4 million due on the earlier of the consummation
of the CBS Merger or, in the event the CBS Merger Agreement is terminated,
December 31, 2000. The notes bear interest at the six-month London Interbank
Rate, as measured from time to time, plus 1.5% per annum, and are secured by
shares of ARS Common Stock having a fair market value of not less than 175% of
the principal amount of and accrued and unpaid interest on the note. The notes
are prepayable at any time at the option of the debtor and will be due and
payable, at the option of the Company, in the event of certain defaults as
described in the notes.

Stock Option Plans--In November 1997, the Company instituted the 1997 Stock
Option Plan, as amended and restated in April 1998, (the Plan) which provides
for the granting of options to employees and directors to acquire up to
15,000,000 shares of ATS Class A and Class B Common Stock. The Plan is
expected to be amended in connection with the ATC Merger, described in Note
11, to limit future grants to Class A Common Stock. No options were granted
under the Plan during 1997. In January 1998, the Company granted 2,911,300
options at an exercise price of $10 per share to employees and directors of
ATS and subsequently granted 1,400,000 options at an exercise price of $13 per
share to employees of an acquired company. (See Note 9).

ATSI also has a stock option plan which provides for the granting of options
to employees to acquire up to 1,000,000 shares of the common stock of ATSI, of
which options to purchase an aggregate of 682,000 shares have been issued. In
addition, approximately 599,000 options to purchase shares of ARS Common Stock
held by current and future employees of ATS may be exchanged for ATS options.
The ATSI options will be exchanged for ATS options and the ARS options may be
exchanged in a manner that will preserve the spread in such options between
the option exercise price and the fair market value of the stock subject
thereto and the ratio of the spread to the exercise price prior to such
conversion. These ARS options are expected to be exchanged, at least in part,
into options to acquire stock of ATS, as part of the CBS Merger.

Exercise prices in the case of incentive stock options are not less than the
fair value of the underlying common stock on the date of grant. Exercise
prices in the case of non-qualified stock options are set at the discretion of
the Board of Directors. Options vest ratably over various periods, generally
five years, commencing one year from the date of grant. There have been no
option grants at exercise prices less than fair value.

The following table summarizes the ATSI option activity for the periods
presented:

<TABLE>
<CAPTION>
WEIGHTED
EXERCISE NUMBER AVERAGE
PRICE CURRENTLY REMAINING
OPTIONS PER SHARE EXERCISABLE LIFE (YEARS)
------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Granted during 1996 and
outstanding at December 31,
1996........................... 550,000 $5.00 160,000 8.71
Granted......................... 172,000 $7.50-$8.00 9.24
Cancelled....................... (40,000) $5.00
------- ----------- ------- ----
Outstanding as of December 31,
1997........................... 682,000 160,000 8.89
======= ======= ====
</TABLE>

As described in Note 1, the intrinsic value method is used to determine
compensation associated with stock option grants. No compensation cost has
been recognized to date for grants under the Plan. Had compensation

F-19

<PAGE>

AMERICAN TOWER SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1998 IS UNAUDITED)

cost for the Company's stock option plan been determined based on the fair
value at the grant date for awards in 1996 and 1997 consistent with the
provisions of FAS 123, the Company's net loss would have been approximately
$568,000 and approximately $2,492,000 for the years ended December 31, 1996
and 1997, respectively. Pro forma basic and diluted net loss per common share
would have been approximately $(0.05) for the year ended December 31, 1997.

The "fair value" of each option grant is estimated on the date of grant
using the minimum value method based on the following key assumptions: risk-
free interest rate of 6.3% and expected lives of 5 years. In accordance with
the provisions of FAS 123, since the Company's stock is not publicly traded,
expected volatility in stock price has been omitted in determining the fair
value for options granted.

9. ACQUISITIONS

1998 Acquisitions

In January 1998, the Company consummated an agreement to acquire all of the
outstanding stock of Gearon & Co. Inc. (Gearon), a company based in Atlanta,
Georgia, for an aggregate purchase price of approximately $80.0 million. The
purchase price consisted of approximately $32.0 million in cash and assumed
liabilities and the issuance of approximately 5.3 million shares of Class A
Common Stock. Gearon is engaged in site acquisition, development, construction
and facility management of wireless network communications facilities on
behalf of its customers and owned or had under construction approximately 40
tower sites. Following consummation, the Company granted options to acquire up
to 1,400,000 shares of Class A Common Stock at an exercise price of $13.00 to
employees at Gearon.

In January 1998, the Company consummated the acquisition of OPM-USA-Inc.
(OPM), a company which owned approximately 90 towers at the time acquisition.
In addition, OPM is in the process of developing an additional 160 towers that
are expected to be constructed during the next 12 to 18 months. The purchase
price, which is variable and based on the number of towers completed and the
forward cash flow of the completed OPM towers, could aggregate up to $105.0
million, of which approximately $21.3 million was paid at the closing. The
company had also agreed to provide the financing to OPM to enable it to
construct the 160 towers in an aggregate amount not to exceed $37.0 million
(less advances as of consummation aggregating approximately $5.7 million,
excluding accrued interest).

In January 1998, the company consummated the acquisition of a communications
site with six towers in Tuscon, Arizona for approximately $12.3 million.

In January 1998, the Company consummated the acquisition of a tower near
Palm Springs, California for approximately $0.75 million.

In January 1998, ARS transferred to ATS 14 communications sites currently
used by ARS and various third parties (with an ARS net book value of
approximately $4.7 million), and ARS and ATS entered into leases or subleases
of space on the transferred towers. Two additional communications sites will
be transferred and leases entered into following acquisition by ARS of the
sites from third parties.

In February 1998, the company acquired 11 communications tower sites in
northern California for approximately $11.8 million.

In March 1998, the Company acquired a tower in Sacramento, California for
approximately $1.2 million.

1997 Acquisitions

In December 1997, the Company consummated the acquisition of a tower site in
Northern California for approximately $2.0 million.

F-20
<PAGE>

AMERICAN TOWER SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1998 IS UNAUDITED)

In October 1997, the Company acquired two affiliated entities operating
approximately 110 tower sites and a tower site management business located
principally in northern California for approximately $45.0 million. In
connection therewith, the Company had also agreed to loan up to $1.4 million
to the sellers on an unsecured basis, of which approximately $0.26 million had
been advanced and was repaid at closing.

In October 1997, the Company acquired tower sites and certain video, voice
and data transport operations for approximately $70.25 million. The acquired
business owned or leased approximately 128 tower sites, principally in the
Mid-Atlantic region, with the remainder in California and Texas.

In September 1997, the Company acquired nine tower sites in Massachusetts
and Rhode Island for approximately $7.2 million and land in Oklahoma for
approximately $0.6 million.

In August 1997, the Company acquired six tower sites in Connecticut and
Rhode Island for approximately $1.5 million.

In July 1997, the Company, in individual transactions, acquired the
following:

(i) the assets of three affiliated entities which owned and operated
approximately fifty towers and a tower site management business in
southern California for an aggregate purchase price of
approximately $33.5 million;

(ii) the assets of one tower site in Washington, D.C. for
approximately $0.9 million;

(iii) the assets of six tower sites in Pennsylvania for approximately
$0.3 million and

(iv) the rights to build five tower sites in Maryland for
approximately $0.5 million.

In May 1997, the Company acquired 21 tower sites and a tower site management
business in Georgia, North Carolina and South Carolina for approximately $5.4
million. The agreement also provides for additional payments by the Company if
the seller is able to arrange for the purchase or management of tower sites
presently owned by an unaffiliated public utility in South Carolina, which
payments could aggregate up to approximately $1.2 million; management believes
that it is unlikely that any such arrangement will be entered into.

In May 1997, the Company acquired the assets of two affiliated companies
engaged in the site acquisition business in various locations in the United
States for approximately $13.0 million.

In May 1997, the Company and an unaffiliated party formed a limited
liability company to own and operate communication towers which will be
constructed on over 50 tower sites in northern California. The Company
advanced approximately $0.8 million to this entity and currently owns a 70%
interest in the entity, with the remaining 30% owned by an unaffiliated party.
The Company is obligated to provide additional financing for the construction
of these and any additional towers it may approve; the obligation for such 50
tower sites is estimated to be approximately $5.3 million. The accounts of the
limited liability company are included in the consolidated financial
statements with the other party's investment reflected as minority interest in
subsidiary.

In May 1997, the Company acquired three tower sites in Massachusetts for
approximately $0.26 million.

1996 Acquisitions

In February 1996, the Company acquired Skyline Communications and Skyline
Antenna Management in exchange for an aggregate of 26,989 shares of ARS Class
A Common Stock, having a fair value of approximately $774,000, $2.2 million in
cash, and the assumption of approximately $300,000 of long-term debt which was
paid at closing. Skyline Communications owned eight towers, six of which are
in West Virginia and

F-21
<PAGE>

AMERICAN TOWER SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1998 IS UNAUDITED)

the remaining two in northern Virginia. Skyline Antenna Management managed
more than 200 antenna sites, primarily in the northeast region of the United
States.

In April 1996, the Company acquired BDS Communications, Inc. and BRIDAN
Communications Corporation for 257,495 shares of ARS Class A common stock
having a fair value of approximately $7.4 million and $1.9 million in cash of
which approximately $1.5 million was paid at closing. BDS Communications owned
three towers in Pennsylvania and BRIDAN Communications managed or had sublease
agreements on approximately forty tower sites located throughout the mid-
Atlantic region.

In July 1996, the Company entered into a limited liability company agreement
with an unaffiliated party relating to the ownership and operation of a tower
site in Needham, Massachusetts, whereby the Company acquired a 50.1% interest
in the corporation for approximately $3.8 million in cash. The accounts of the
limited liability company are included in the consolidated financial
statements with the other party's investment reflected as minority interest in
subsidiary.

In October 1996, the Company acquired the assets of tower sites in Hampton,
Virginia and North Stonington, Connecticut for approximately $1.4 million and
$1.0 million in cash, respectively.

Substantially all of the 1996 acquisitions were consummated by ARS and the
net assets were subsequently contributed to the Company.

The acquisitions consummated during 1997 and 1996 have been accounted for by
the purchase method of accounting. The purchase price has been preliminarily
allocated to the assets acquired, principally intangible and tangible assets,
and the liabilities assumed based on their estimated fair values at the date
of acquisition. The excess of purchase price over the estimated fair value of
the net assets acquired has been recorded as unallocated purchase price. The
financial statements reflect the preliminary allocation of certain purchase
prices as the appraisals of the assets acquired have not been finalized. The
Company does not expect any changes in depreciation and amortization as a
result of such appraisals to be material to the consolidated results of
operations.

Unaudited Pro Forma Operating Results--The operating results of these
acquisitions have been included in the Company's consolidated results of
operations from the date of acquisition. The following unaudited pro forma
summary presents the consolidated results of operations as if the acquisitions
had occurred as of January 1, 1996 after giving effect to certain adjustments,
including depreciation and amortization of assets and interest expense on debt
incurred to fund the acquisitions. These unaudited pro forma results have been
prepared for comparative purposes only and do not purport to be indicative of
what would have occurred had the acquisitions been made as of January 1, 1996
or results which may occur in the future.

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1996 1997
------------ ------------
<S> <C> <C>
Net revenues.................................... $35,601,000 $44,933,000
Loss before extraordinary loss.................. (21,716,000) (8,998,000)
Net loss........................................ (21,716,000) (9,692,000)
Basic and diluted pro forma loss per common
share.......................................... (0.20)
</TABLE>

F-22
<PAGE>

AMERICAN TOWER SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1998 IS UNAUDITED)

10. SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow information and noncash investing and financing
activities are as follows:

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED THREE MONTHS
DECEMBER 31, DECEMBER 31, ENDED MARCH 31,
1996 1997 1997 1998
------------ ------------ ------- -----------
<S> <C> <C> <C> <C>
Supplemental cash flow informa-
tion:
Cash paid during the period for
interest (including amounts
capitalized).................. $ 90,539 $2,398,201 $95,504 $ 1,433,066
Cash paid during the period for
income
taxes......................... 124,988 19,800
Noncash investing and financing
activities:
Property and equipment trans-
ferred from Parent............ 11,103,352 50,000 4,729,047
Property and equipment trans-
ferred to
Parent........................ (725,000)
Land transferred to Parent..... (1,100,000)
Deferred financing costs paid
by Parent..................... 1,255,474
Investment in affiliate paid by
Parent........................ 325,000
Issuance of common stock for
acquisition................... 48,000,000
Increase in tax basis and due
to Parent from corporate re-
structuring................... 125,210,000
Issuance of notes receivable to
stockholders.................. 49,375,000
Details of acquisitions financed
by Parent:
Purchase price of net assets
acquired...................... 20,954,401
Liabilities assumed............ (2,219,637)
Stock issued by Parent......... (8,153,312)
-----------
Cash paid by Parent............ 10,581,452
Less: cash acquired............ (1,600,000)
-----------
Net cash paid by Parent for ac-
quisitions.................... $ 8,981,452
===========
</TABLE>

11. OTHER TRANSACTIONS

Pending Transactions:

In December 1997, the Company entered into a merger agreement with American
Tower Corporation (ATC) pursuant to which ATC will merge with and into ATS
(the ATC Merger), which will be the surviving corporation. Pursuant to the
merger, ATS expects to issue an aggregate of approximately 30.0 million shares
of ATS Class A Common Stock (including shares issuable upon exercise of
options to acquire ATC Common Stock which will become options to acquire ATS
Class A Common Stock). ATC is engaged in the business of acquiring, developing
and leasing wireless communications sites to companies using or providing
cellular telephone, paging, microwave and specialized mobile radio services.
At December 31, 1997, ATC owned and operated approximately 775 communications
towers located in 31 states. Consummation of the transaction is subject to,
among other things, the expiration or earlier termination of the Hart-Scott
Rodino Antitrust Improvements Act of 1976, as amended (HSR Act) waiting
period, and is expected to occur in the Spring of 1998. (See Note 12).

In January 1998, the Company entered into an agreement to purchase the
assets relating to a teleport business serving the Washington, D.C. area for a
purchase price of approximately $30.5 million. The facility is

F-23
<PAGE>

AMERICAN TOWER SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1998 IS UNAUDITED)

located is northern Virginia, inside of the Washington Beltway, on ten acres.
Consummation of the transaction is expected to occur in the Spring of 1998.
(See Note 12).

ATS is negotiating certain changes in the ATS/PCS, LLC (formerly
Communications Systems Development, LLC) arrangements, including the
acquisition by ATS for the 58 communications sites in northern California
presently owned by ATS/PCS, LLC in exchange for shares of Class A Common
Stock, arrangements with respect to development of communications sites in
other locations, a priority return of ATS's construction advances, an increase
in the percentage interest of the other member in ATS/PCS, LLC and a
management fee to ATS.

ATS is also negotiating an agreement to acquire a company which is in the
process of constructing approximately 40 towers in the Tampa, Florida area, of
which seven are presently operational. The purchase price will be equal to the
excess of (i) ten times the "Current Run Rate Cash Flow" at the time of
closing, over (ii) the principal amount of the secured note referred to below.
The purchase price will be payable in shares of Class A Common Stock (valued
at market prices shortly prior to closing) and, at the election of the seller,
cash in an amount not to exceed 49% of the purchase price. "Current Run Rate
Cash Flow" means twelve (12) times the excess of net revenues over the direct
operating expenses for the month preceding closing. ATS is obligated to
advance construction funds to the seller in an aggregate amount not to exceed
$12.0 million in the form of a secured note (guaranteed by the stockholders on
a nonrecourse basis and secured by the stock of the seller), of which
approximately $1.0 million was advanced through March 31, 1998. The secured
note would be payable in the event a definitive acquisition agreement is not
executed or if the acquisition were not consummated. Subject to the
negotiation and execution of a definitive agreement and to the satisfaction of
certain conditions, including, depending on the circumstances, the expiration
or earlier termination of the HSR Act waiting period, the acquisition is
expected to be consummated in the Spring of 1999.

* * * * * *

12.EVENTS SUBSEQUENT TO DATE OF INDEPENDENT AUDITORS' REPORT (UNAUDITED)

CBS Merger Tax Liability:

Assuming the "fair market value" of ARS' stock interest in ATS was equal to
$20 11/16 per share, the last reported sale price of such stock in the "when-
issued" market on May 22, 1998, the total estimated tax reimbursement ATS
would be required to make would be between $270.0 and $300.0 million,
depending on applicable state tax rates. Such estimate gives effect to
deductions of approximately $88.0 million, based on such closing price,
available to ARS as a consequence of stock option cancellations contemplated
by the CBS Merger. The tax reimbursement would change by between approximately
$20.5 and $22.5 million, again depending on applicable state tax rates, for
each $1.00 change in the "fair market value" of the common stock under the tax
reporting position to be followed. The estimates described above are based on
a number of assumptions and interpretations of various applicable income tax
rules and are subject to change.

Closing Date Balance Sheet Adjustments:

The ARS-ATS Separation Agreement provides for closing date balance sheet
adjustments based upon the working capital, as defined, and debt levels of
ARS. ATS will benefit from or bear the cost of such adjustments.

F-24
<PAGE>

AMERICAN TOWER SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONCLUDED)

(INFORMATION FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1998 IS UNAUDITED)

ATS' preliminary estimate of such adjustments is that it will not be required
to make a payment of more than $40.0 million and that, in addition, it will be
required to reimburse CBS for the tax consequences of any such payment, which
could result in additional liability to ATS of approximately $26.0 million
(assuming a payment of $40.0 million) under the tax reporting method to be
followed and as to which a refund claim will be filed. Since the amounts of
working capital and debt are dependent upon the uncertainty, among other
things, of recent operating results and cash capital contributions, as well as
CBS Merger expenses and the interpretation and intent of certain provisions of
the CBS Merger Agreement as to which certain issues between ATS and CBS exist,
the ultimate payment will differ from the estimate provided herein and ATS is
unable to state definitively what payments will be owed by ATS to CBS.

Interim Financing Agreement:

ATS has entered into a stock purchase agreement with respect to a preferred
stock financing (the Interim Financing) which provides for the issuance and
sale by ATS of up to $400.0 million of redeemable preferred stock (the Interim
Preferred Stock). ATS plans to draw on such commitment and sell Interim
Preferred Stock to finance its obligations to CBS for the tax reimbursement.
Consummation of the Interim Financing is subject to the negotiation and
execution of a definitive preferred stock purchase agreement and satisfaction
of the closing conditions to be set forth therein. ATS intends to redeem the
Interim Preferred Stock, to the extent issued, out of the proceeds of this
Offering.

Aquisitions:

In April 1998, ATS entered into an agreement to acquire a broadcasting tower
in the Boston, Massachusetts area for 720,000 shares of Class A Common Stock.
Subject to the satisfaction of certain conditions, the acquisition is expected
to be consummated in the second quarter of 1998.

In May 1997, the Company acquired the assets relating to a teleport business
serving the Washington, D.C. area for a purchase price of approximately $30.5
million.

F-25
<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

MicroNet, Inc. and Affiliates and
American Tower Systems, Inc.

We have audited the accompanying combined statements of net assets of
MicroNet, Inc. and affiliates sold to American Tower Systems, Inc. (the
"Company") as of December 31, 1996 and October 31, 1997, and the related
combined statements of income and cash flows derived from those assets for the
year ended December 31, 1996, and the ten months ended October 31, 1997. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

In our opinion, such combined financial statements present fairly, in all
material respects, the net assets of MicroNet, Inc. and affiliates sold to
American Tower Systems, Inc. as of December 31, 1996 and October 31, 1997, and
the results of operations related to those assets, and cash flows generated
from those assets for the year ended December 31, 1996, and the ten months
ended October 31, 1997, in conformity with generally accepted accounting
principles.

The accompanying combined financial statements have been prepared from the
separate records maintained by the Company and may not be indicative of the
conditions that would have existed or the results of operations had the net
assets sold been operated as an unaffiliated company. Certain expenses
represent allocations made by the Company's Parent, and, as discussed in Note
A, no provision for income taxes has been made in the combined statements of
income derived from the net assets sold.

Pressman Ciocca Smith LLP

Hatboro, Pennsylvania
February 26, 1998

F-26
<PAGE>

MICRONET, INC. AND AFFILIATES

COMBINED STATEMENTS OF NET ASSETS SOLD

DECEMBER 31, 1996 AND OCTOBER 31, 1997

<TABLE>
<CAPTION>
DECEMBER 31, OCTOBER 31,
1996 1997
------------ ------------
<S> <C> <C>
ASSETS
Current Assets
Prepaid expenses.................................. $ 301,942 $ 465,611
------------ ------------
Total Current Assets............................ 301,942 465,611
Property and Equipment.............................. 39,564,758 40,329,382
Less accumulated depreciation..................... (22,486,975) (24,513,888)
------------ ------------
17,077,783 15,815,494
Goodwill, net of amortization....................... 4,120,276 3,691,081
Intangible Assets, net of amortization.............. 902,227 742,047
Other Assets........................................ 183,087 70,354
------------ ------------
$ 22,585,315 $ 20,784,587
============ ============
LIABILITIES AND NET ASSETS TO BE SOLD
Current Liabilities
Customer service prepayments...................... $ 459,638 $ 307,961
------------ ------------
Total Current Liabilities....................... 459,638 307,961
Commitments and Contingencies
Net Assets To Be Sold............................... 22,125,677 20,476,626
------------ ------------
$ 22,585,315 $ 20,784,587
============ ============
</TABLE>

See accompanying notes.

F-27
<PAGE>

MICRONET, INC. AND AFFILIATES

COMBINED STATEMENTS OF INCOME DERIVED FROM NET ASSETS SOLD

YEAR ENDED DECEMBER 31, 1996, AND TEN MONTHS ENDED OCTOBER 31, 1997

<TABLE>
<CAPTION>
TEN MONTHS
YEAR ENDED ENDED
DECEMBER OCTOBER 31,
31, 1996 1997
----------- -----------
<S> <C> <C>
Net Revenues.......................................... $15,058,305 $15,103,459
Operating Expenses
Service............................................. 5,955,270 5,670,523
Selling and marketing............................... 488,857 347,475
General and administrative.......................... 3,422,581 2,676,978
Depreciation........................................ 3,199,495 2,034,072
Amortization........................................ 736,025 591,775
----------- -----------
13,802,228 11,320,823
----------- -----------
Operating Income...................................... 1,256,077 3,782,636
Other Income--Net..................................... 42,904 33,681
----------- -----------
Net Income Derived from Net Assets To Be Sold......... 1,298,981 3,816,317
Net Assets To Be Sold, Beginning of Period............ 22,563,349 22,125,677
Distributions To Parent............................... (1,736,653) (5,465,368)
----------- -----------
Net Assets To Be Sold, End of Period.................. $22,125,677 $20,476,626
=========== ===========
</TABLE>

See accompanying notes.

F-28
<PAGE>

MICRONET, INC. AND AFFILIATES

COMBINED STATEMENTS OF CASH FLOWS DERIVED FROM NET ASSETS SOLD

YEAR ENDED DECEMBER 31, 1996, AND TEN MONTHS ENDED OCTOBER 31, 1997

<TABLE>
<CAPTION>
TEN MONTHS
ENDED
YEAR ENDED OCTOBER
DECEMBER 31,
31, 1996 1997
----------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Income derived from net assets sold.................. $ 1,298,981 $3,816,317
Adjustments to reconcile income derived from net
assets sold to cash provided by operating
activities:
Depreciation and amortization...................... 3,935,520 2,625,847
Loss (gain) on disposal of property and equipment.. (400) 9,062
Write off assets to net realizable value........... 65,313 --
Change in assets and liabilities:
Prepaid expenses................................. (49,781) (163,669)
Other assets..................................... 15,396 112,733
Customer service prepayments..................... 149,642 (151,677)
----------- ----------
CASH PROVIDED BY OPERATING ACTIVITIES................ 5,414,671 6,248,613
----------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment................... (3,678,418) (783,845)
Increase in intangible assets........................ -- (2,400)
Proceeds from sale of property and equipment......... 400 3,000
----------- ----------
CASH USED FOR INVESTING ACTIVITIES................... (3,678,018) (783,245)
----------- ----------
INCREASE IN CASH AND CASH EQUIVALENTS BEFORE
ADJUSTMENT.......................................... 1,736,653 5,465,368
ADJUSTMENT FOR NET ASSETS NOT SOLD................... (1,736,653) (5,465,368)
----------- ----------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS......................................... $ -- $ --
=========== ==========
</TABLE>

See accompanying notes.

F-29
<PAGE>

MICRONET, INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1996 AND OCTOBER 31, 1997

NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of MicroNet, Inc. and
affiliates (the "Company") is presented to assist in understanding its
combined financial statements. These accounting policies conform to generally
accepted accounting principles and have been consistently applied in the
preparation of the combined financial statements.

Basis of Presentation and Combination

The accompanying combined statements of net assets sold to American Tower
Systems, Inc. ("ATS") are intended to present the assets and liabilities of
the Company sold to ATS (the "Net Assets") pursuant to an asset purchase
agreement between ATS and Suburban Cable TV Co. Inc. ("Suburban") and the
income and cash flows derived from such assets and liabilities. MicroNet is a
wholly owned subsidiary of Suburban (the "Company's Parent"), which is a
wholly owned subsidiary of Lenfest Communications, Inc. ("LCI"). As of July 8,
1997, the Company agreed to sell substantially all of the operating assets of
its communication towers, satellite transmission and microwave video and data
signal transmission businesses to ATS for approximately $70.25 million. The
accompanying combined statements include 128 operating tower sites of the
Company, including 28 tower sites operated by Suburban and other cable TV
operating subsidiaries of LCI. The transaction closed as of October 31, 1997.

The combined financial statements include the accounts of MicroNet, Inc. and
those of all wholly owned subsidiaries, excluding the assets, liabilities and
results of operations of assets not sold to ATS. The combined financial
statements also include the assets, liabilities and results of operations of
the 28 tower sites included in the sale that are operated by Suburban and
other cable TV operating subsidiaries of LCI.

Business Activity and Concentrations of Credit Risk

The Company provides satellite and microwave transmission of video, voice
and data communications and tower site rental throughout the United States.
The Company grants credit to broadcast and cable networks and cellular and
paging companies throughout the nation. Consequently, the Company's ability to
collect the amounts due from customers is affected by economic fluctuations in
these industries.

Use of Estimates

The preparation of the combined financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the combined
financial statements and reported amounts of revenues and expenses during the
reporting period. Actual results may differ from those estimates, and such
differences could be material to the combined financial statements.

Property and Equipment

Property and equipment are stated at cost. For acquired communication
networks and facilities, the purchase price has been allocated to net assets
on the basis of appraisal reports issued by an independent appraiser.
Depreciation is provided using the accelerated and straight-line methods of
depreciation for financial reporting purposes at rates based on estimated
useful lives ranging from 3 to 33 years.

Expenditures for renewals and betterments that extend the useful lives of
property and equipment are capitalized. Expenditures for maintenance and
repairs are charged to expense as incurred.

F-30
<PAGE>

MICRONET, INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

Capitalization of Costs

All costs properly attributable to capital items, including that portion of
employees' compensation allocable to installation, engineering, design,
construction and various other capital projects are capitalized.

Goodwill and Intangible Assets

Goodwill and intangible assets acquired in connection with the purchases of
communications networks and facilities have been valued at acquisition cost on
the basis of the allocation of the purchase price on a fair market value basis
to net assets as determined by an independent appraiser. Additions to these
assets are stated at cost. Intangible assets consist of FCC licenses,
organization costs and covenants not to compete. The intangible assets are
being amortized on the straight-line method over their legal or estimated
useful lives to a maximum of forty (40) years. Goodwill represents the cost of
an acquired partnership interest in excess of amounts allocated to specific
assets based on their fair market values. Goodwill is amortized on the
straight-line method over ten years. In accordance with Statement of Financial
Accounting Standards No. 121 "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of ", the Company assesses on
an on-going basis the recoverability of intangible assets based on estimates
of future undiscounted cash flows for the applicable business acquired
compared to net book value. If the future undiscounted cash flow estimate is
less than net book value, net book value is then reduced to the undiscounted
cash flow estimate. The Company also evaluates the amortization periods of
intangible assets to determine whether events or circumstances warrant revised
estimates of useful lives. As of October 31, 1997, management believes that no
revisions to the remaining useful lives or writedowns of deferred charges are
required.

Revenue Recognition

The Company bills certain customers in advance; however, revenue is
recognized as services are provided. Credit risk is managed by discontinuing
services to customers who are delinquent.

Income Taxes

The Company, as a participating subsidiary, joins in the filing of a
consolidated Federal tax return with LCI. Current and deferred Federal income
taxes are allocated among LCI and its consolidated subsidiaries based upon the
respective net income (loss) and timing differences of each company. The
Company files separate state tax returns. No provision for income taxes has
been made in the combined financial statements. Deferred tax assets and
liabilities are excluded from net assets sold.

Advertising

The Company follows the policy of charging the costs of advertising to
expense as incurred.

Fair Value of Financial Instruments

The Company believes that the carrying value of all financial instruments is
a reasonable estimate of fair value at December 31, 1996 and October 31, 1997.

NOTE B--SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

ATS did not assume any debt of the Company. There is no interest expense
paid reflected in the accompanying financial statements. The Company did not
make any income tax payments to LCI.

In 1996, the Company wrote down $65,313 of property and equipment to net
realizable value. (See Note C).

F-31
<PAGE>

MICRONET, INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

NOTE C--PROPERTY AND EQUIPMENT

The schedule of property and equipment at December 31, 1996 and October 31,
1997, is as follows:

<TABLE>
<CAPTION>
ESTIMATED
DECEMBER 31, OCTOBER 31, USEFUL LIVES
1996 1997 IN YEARS
------------ ------------ ------------
<S> <C> <C> <C>
Land................................ $ 3,027,303 $ 3,027,303
Building and improvements........... 1,799,553 1,814,012 15-33
Computer equipment.................. 291,002 299,976 5
Furniture, fixtures and office
equipment.......................... 616,678 619,028 7
Tower, head-end equipment and
microwave equipment................ 32,289,707 33,025,202 7-15
Land improvements................... 188,195 206,337 7-15
Leasehold improvements.............. 278,430 278,430 5-15
Radio equipment..................... 9,360 9,360 5-7
Test equipment...................... 584,458 588,305 7
Vehicles............................ 480,072 461,429 3-5
------------ ------------
$ 39,564,758 $ 40,329,382
============ ============
</TABLE>

During 1996, the Company recognized an impairment loss in connection with a
failed project to rebuild a tower. The township denied the Company's request
to tear-down and rebuild a larger tower on an existing tower site. Legal and
engineering costs associated with the project in the amount of $65,313,
previously capitalized, were written off. This impairment loss is included in
general and administrative expenses in the 1996 combined statement of income.

NOTE D--GOODWILL

The excess of the purchase price paid over the acquired net assets has been
allocated to goodwill. Accumulated amortization at December 31, 1996 and
October 31, 1997, was $1,030,069 and $1,459,264, respectively.

NOTE E--INTANGIBLE ASSETS

A schedule of intangible assets and accumulated amortization at December 31,
1996 and October 31, 1997, is as follows:

<TABLE>
<CAPTION>
DECEMBER 31, 1996
----------------------------------
ACCUMULATED
DESCRIPTION AMOUNT AMORTIZATION NET
----------- ----------- ------------ ---------
<S> <C> <C> <C>
FCC licenses............................ $ 326,163 $ 49,238 $ 276,925
Organization costs and covenants not to
compete................................ 1,201,174 575,872 625,302
----------- --------- ---------
$ 1,527,337 $ 625,110 $ 902,227
=========== ========= =========
<CAPTION>
OCTOBER 31, 1997
----------------------------------
ACCUMULATED
DESCRIPTION AMOUNT AMORTIZATION NET
----------- ----------- ------------ ---------
<S> <C> <C> <C>
FCC licenses............................ $ 326,163 $ 56,033 $ 270,130
Organization costs and covenants not to
compete................................ 1,203,574 731,657 471,917
----------- --------- ---------
$ 1,529,737 $ 787,690 $ 742,047
=========== ========= =========
</TABLE>

F-32
<PAGE>

MICRONET, INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

NOTE F--LEASES

The Company leases office space from an individual who is a shareholder,
chairman of the board and chief executive officer of LCI. The lease began on
May 24, 1990, and is classified as an operating lease. The initial lease term
assumed by ATS expires October 31, 1998.

Future minimum lease payments under all non-cancelable operating leases with
initial terms of one year or more consisted of the following at October 31,
1997:

<TABLE>
<CAPTION>
RELATED
YEAR ENDING DECEMBER 31, PARTY OTHER
------------------------ ------- -----------
<S> <C> <C>
1998............................................... $81,874 $ 997,956
1999............................................... -- 833,947
2000............................................... -- 784,922
2001............................................... -- 750,748
2002............................................... -- 548,683
Thereafter.......................................... -- 1,535,365
------- -----------
Total minimum lease payments......................... $81,874 $ 5,451,621
======= ===========
</TABLE>

Rental expense for all operating leases, principally head-end land and
building facilities, amounted to $1,149,855 for the year ended December 31,
1996, and $982,484 for the ten months ended October 31, 1997. In addition, the
Company made total payments to the related party for office space of $81,874
for the year ended December 31, 1996, and $68,228 for the ten month period
ended October 31, 1997.

In addition to fixed rentals, certain leases require payment of maintenance
and real estate taxes and contain escalation provisions based on future
adjustments in price indices. It is expected that, in the normal course of
business, expiring leases will be renewed or replaced by leases on other
properties; thus, it is anticipated that future minimum operating lease
commitments will not be less than the annualized amount shown for the ten
months ended October 31, 1997.

NOTE G--LESSOR OPERATING LEASES

The Company is the lessor of tower and head-end equipment and microwave
equipment under operating leases expiring in various years through 2005.
Rental income from operating leases amounted to $5,909,260 for the year ended
December 31, 1996, and $7,624,515 for the ten months ended October 31, 1997.

Following is a summary of property held for lease at December 31, 1996 and
October 31, 1997:

<TABLE>
<CAPTION>
DECEMBER 31, OCTOBER 31,
1996 1997
------------ ------------
<S> <C> <C>
Tower, head-end equipment and microwave
equipment................................. $ 32,289,707 $ 33,025,202
Less accumulated depreciation.............. (20,271,612) (22,049,480)
------------ ------------
$ 12,018,095 $ 10,975,722
============ ============
</TABLE>

F-33
<PAGE>

MICRONET, INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

Minimum future rentals to be received on non-cancelable leases consisted of
the following as of October 31, 1997:

<TABLE>
<CAPTION>
YEAR ENDING OCTOBER 31,
-----------------------
<S> <C>
1998....................................................... $ 7,778,174
1999....................................................... 5,481,722
2000....................................................... 4,671,884
2001....................................................... 3,327,044
2002....................................................... 831,607
Thereafter.................................................. 299,311
------------
$ 22,389,742
============
</TABLE>

NOTE H--OTHER INCOME

The schedules of other income for the year ended December 31, 1996, and ten
months ended October 31, 1997, are as follows:

<TABLE>
<CAPTION>
YEAR ENDED TEN MONTHS ENDED
DECEMBER 31, OCTOBER 31,
1996 1997
------------ ----------------
<S> <C> <C>
Interest income.............................. $ 42,504 $ 42,743
Gain (loss) on disposal of property and
equipment................................... 400 (9,062)
-------- --------
$ 42,904 $ 33,681
======== ========
</TABLE>

NOTE I--EMPLOYEE HEALTH BENEFIT PLAN

As a subsidiary of LCI, the Company participates in the Lenfest Group
Employee Health Plan (a trust) in order to provide health insurance for its
employees. This trust is organized under Internal Revenue Code Section
501(c)(9)--Voluntary Employee Beneficiary Association (VEBA). Benefits are
prefunded by contributions from the Company and all other participating LCI
subsidiaries. Insurance expense is recognized as incurred. The Company does
not provide postretirement benefits to its employees. Therefore, Statement of
Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other than Pensions", does not have an impact on the
Company's financial statements.

NOTE J--401(K) PLAN

LCI provides a 401(k) retirement plan to the employees of its subsidiaries.
The Company, as an indirect wholly owned subsidiary, is entitled to
participate. The Company matches the entire amount contributed by an eligible
employee up to 5% of their salary, subject to regulatory limitations. For the
year ended December 31, 1996, the Company matched $112,033 of contributions.
For the ten months ended October 31, 1997, the Company matched $90,616.

NOTE K--RELATED PARTY TRANSACTIONS

The Company does business and generates revenue with subsidiaries of Tele-
Communications, Inc. ("TCI"), (a stockholder of LCI, through an indirect,
wholly owned subsidiary). The amount of revenues generated was $1,225,000 for
the year ended December 31, 1996, and $1,477,000 for the ten months ended
October 31, 1997. An additional $69,000 received from TCI was included in
customer service prepayments as of December 31, 1996 and October 31, 1997.

F-34
<PAGE>

MICRONET, INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

All services provided to related parties were at standard billing rates.

Certain management services are provided to the Company by Suburban. Such
services include legal, tax, treasury, risk management, benefits
administration and other support services. Included in selling, general and
administrative expenses for the year ended December 31, 1996, and the ten
months ended October 31, 1997, were allocated expenses of $108,000 and
$90,000, respectively, related to these services. Allocated expenses are based
on Suburban's estimate of expenses related to the services provided to the
Company in relation to those provided to other affiliates of Suburban.
Management believes that these allocations were made on a reasonable basis.
However, the allocations are not necessarily indicative of the level of
expenses that might have been incurred had the Company contracted directly
with third parties. Management has not made a study or any attempt to obtain
quotes from third parties to determine what the cost of obtaining such
services from third parties would have been. The fees and expenses charged by
Suburban are subject to change.

The Company entered into a lease agreement with a principal stockholder of
LCI (See Note F).

F-35
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and
Stockholders of Diablo
Communications, Inc. (A California
S Corporation):

We have audited the accompanying balance sheets of Diablo Communications,
Inc. (the "Company"), as of December 31, 1995 and 1996, and the related
statements of income, stockholders' equity and cash flows for the years then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Company as of December 31, 1995 and
1996, and the results of its operations and its cash flows for the years then
ended in conformity with generally accepted accounting principles.

/s/ Deloitte & Touche LLP

Deloitte & Touche LLP
San Francisco, California
November 4, 1997

F-36
<PAGE>

DIABLO COMMUNICATIONS, INC.
(A CALIFORNIA S CORPORATION)

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------ SEPTEMBER 30,
1995 1996 1997
----------- ----------- -------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash................................. $ 515,896 $ 708,434 $ 554,201
Accounts receivable:
Trade, net of allowance for doubt-
ful accounts of $10,000 at each
date.............................. 292,971 334,926 398,844
Affiliates......................... 440,532 560,813 1,231,952
Prepaid and other current assets..... 242,436 160,678 199,702
----------- ----------- ----------
Total current assets............. 1,491,835 1,764,851 2,384,699
PROPERTY AND EQUIPMENT, net............ 1,720,423 2,952,926 2,992,593
INVESTMENT IN AFFILIATE................ 4,158 10,053 7,757
DEPOSITS AND OTHER ASSETS.............. 224,338 182,984 293,617
----------- ----------- ----------
TOTAL.................................. $ 3,440,754 $ 4,910,814 $5,678,666
=========== =========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable..................... $ 191,258 $ 246,579 $ 188,624
Accrued expenses..................... 164,211 232,691 178,000
Deferred revenue..................... 340,556 364,865 250,056
Current portion of long-term debt.... 303,045 420,875 505,129
----------- ----------- ----------
Total current liabilities........ 999,070 1,265,010 1,121,809
----------- ----------- ----------
LONG-TERM DEBT......................... 925,002 1,786,410 1,732,390
----------- ----------- ----------
COMMITMENTS AND CONTINGENCIES (Note 4)
STOCKHOLDERS' EQUITY:
Common stock, no par value,
10,000,000 shares authorized,
202,000 shares issued and outstand-
ing................................. 3,465,242 3,465,242 3,465,242
Accumulated deficit.................. (1,948,560) (1,605,848) (640,775)
----------- ----------- ----------
Total stockholders' equity....... 1,516,682 1,859,394 2,824,467
----------- ----------- ----------
TOTAL.................................. $ 3,440,754 $ 4,910,814 $5,678,666
=========== =========== ==========
</TABLE>

See notes to financial statements.

F-37
<PAGE>

DIABLO COMMUNICATIONS, INC.
(A CALIFORNIA S CORPORATION)

STATEMENTS OF INCOME

<TABLE>
<CAPTION>
YEARS ENDED NINE MONTHS ENDED
DECEMBER 31, SEPTEMBER 30,
---------------------- ----------------------
1995 1996 1996 1997
---------- ---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C>
REVENUES:
Tower revenues................ $5,925,022 $6,337,292 $4,778,569 $5,878,022
Sublease revenues--related
party........................ 414,000 365,500 253,500 337,940
Management fees--related par-
ty........................... 96,968 97,513 70,531 80,621
Insurance proceeds............ -- 213,000 -- --
---------- ---------- ---------- ----------
Total revenues.............. 6,435,990 7,013,305 5,102,600 6,296,583
---------- ---------- ---------- ----------
OPERATING EXPENSES:
General and administrative.... 1,229,313 1,414,136 1,036,774 968,071
Depreciation and amortiza-
tion......................... 283,023 416,883 359,184 359,856
Rent expense.................. 1,875,527 2,039,302 1,512,615 1,829,720
Technical..................... 1,422,267 1,618,722 1,144,103 1,244,912
Sales and promotional......... 433,443 530,447 393,685 430,846
---------- ---------- ---------- ----------
Total operating expenses.... 5,243,573 6,019,490 4,446,361 4,833,405
---------- ---------- ---------- ----------
INCOME FROM OPERATIONS.......... 1,192,417 993,815 656,239 1,463,178
OTHER INCOME (EXPENSE), NET..... (120,388) (144,257) (90,335) 133,704
---------- ---------- ---------- ----------
NET INCOME...................... $1,072,029 $ 849,558 $ 565,904 $1,596,882
========== ========== ========== ==========
</TABLE>

See notes to financial statements.

F-38
<PAGE>

DIABLO COMMUNICATIONS, INC.
(A CALIFORNIA S CORPORATION)

STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK
----------------------
OUTSTANDING ACCUMULATED
SHARES AMOUNT DEFICIT TOTAL
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1994.... 202,000 $3,465,242 $(1,689,475) $ 1,775,767
Cash and noncash
distributions to
stockholders............... (1,331,114) (1,331,114)
Net income.................. 1,072,029 1,072,029
------- ---------- ----------- -----------
BALANCE, DECEMBER 31, 1995.... 202,000 3,465,242 (1,948,560) 1,516,682
Cash distributions to stock-
holders.................... (506,846) (506,846)
Net income.................. 849,558 849,558
------- ---------- ----------- -----------
BALANCE, DECEMBER 31, 1996.... 202,000 3,465,242 (1,605,848) 1,859,394
Cash distributions to stock-
holders (unaudited)........ (631,809) (631,809)
Net income (unaudited)...... -- -- 1,596,882 1,596,882
------- ---------- ----------- -----------
BALANCE, SEPTEMBER 30, 1997
(unaudited).................. 202,000 $3,465,242 $ (640,775) $ 2,824,467
======= ========== =========== ===========
</TABLE>

See notes to financial statements.

F-39
<PAGE>

DIABLO COMMUNICATIONS, INC.
(A CALIFORNIA S CORPORATION)

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEARS ENDED NINE MONTHS ENDED
DECEMBER 31, SEPTEMBER 30,
----------------------- ----------------------
1995 1996 1996 1997
---------- ----------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING AC-
TIVITIES:
Net income................... $1,072,029 $ 849,558 $ 565,904 $1,596,882
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortiza-
tion....................... 283,023 416,883 359,184 359,856
Changes in assets and lia-
bilities:
Accounts receivable--
trade..................... (163,273) (30,000) (213,355) (63,918)
Accounts receivable--Affil-
iates..................... (244,175) (132,236) (74,543) (671,139)
Prepaid and other current
assets.................... (178,370) 81,758 (16,395) (39,024)
Deposits and other assets.. (37,181) 22,778 65,703 (108,337)
Accounts payable and ac-
crued expenses............ 115,175 123,801 (265,136) (112,646)
Deferred revenue........... 67,287 24,309 69,329 (114,809)
---------- ----------- ---------- ----------
Net cash provided by oper-
ating activities......... 914,515 1,356,851 490,691 846,865
---------- ----------- ---------- ----------
CASH FLOW FROM INVESTING
ACTIVITIES--Purchases of
property and equipment....... (948,781) (1,636,705) (1,219,152) (399,523)
---------- ----------- ---------- ----------
CASH FLOWS FROM FINANCING AC-
TIVITIES:
Long-term borrowings........ 500,000 1,250,000 1,250,000 217,075
Repayments of long-term
debt....................... (50,469) (270,762) (192,775) (186,841)
Cash distributions to stock-
holders.................... (880,193) (506,846) (362,171) (631,809)
---------- ----------- ---------- ----------
Net cash provided by (used
in) financing
activities............... (430,662) 472,392 695,054 (601,575)
---------- ----------- ---------- ----------
NET INCREASE (DECREASE) IN
CASH......................... (464,928) 192,538 (33,407) (154,233)
CASH, BEGINNING OF PERIOD..... 980,824 515,896 515,896 708,434
---------- ----------- ---------- ----------
CASH, END OF PERIOD........... $ 515,896 $ 708,434 $ 482,489 $ 554,201
========== =========== ========== ==========
SUPPLEMENTAL INFORMATION:
Cash paid for interest...... $ 92,384 $ 140,970 $ 91,988 $ 90,335
Noncash distribution to
stockholders............... 450,921 -- -- --
</TABLE>

See notes to financial statements.

F-40
<PAGE>

DIABLO COMMUNICATIONS, INC.
(A CALIFORNIA S CORPORATION)

NOTES TO FINANCIAL STATEMENTS
(INFORMATION AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997
IS UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business and Corporate Structure--Diablo Communications, Inc. (the
"Company") is engaged in acquiring, developing and operating communications
towers, for use by radio operators as well as other communication related
businesses. As of December 31, 1996, the Company owned and/or operated 81
towers and rooftops throughout Northern California.

Sale of the Company--On October 9, 1997, substantially all of the Company's
assets were sold to American Tower Systems, Inc. ("ATS"). ATS also assumed the
Company's operating lease agreements and certain of the Company's liabilities
on that date. The sale price was approximately $40,000,000. Subsequent to the
sale, the Company changed its name and will pursue other business
opportunities as Tyris Corporation.

Use of Estimates--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual amounts could differ from these estimates.

Unaudited Interim Information--The financial information with respect to the
nine-month periods ended September 30, 1996 and 1997 is unaudited. In the
opinion of management, such information contains all adjustments, consisting
only of normal recurring adjustments, necessary for a fair presentation of the
results of such periods. The results of operations for the nine months ended
September 30, 1997 are not necessarily indicative of the results to be
expected for the full year.

Impairment of Long-Lived Assets--In March 1995, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed of ("FAS 121"). FAS 121 addresses the accounting for the
impairment of long-lived assets, certain intangibles and goodwill when events
or changes in circumstances indicate that the carrying amount of an asset may
not be recoverable. The Company adopted this statement during 1996 and the
impact on the Company's results of operations, liquidity or financial position
was not material.

Property and Equipment--Property and equipment are recorded at cost.
Depreciation is provided using the double-declining method over estimated
useful lives ranging from 3 to 15 years.

Investment in Affiliate--The Company owns a 25% interest in New Loma
Communications, Inc. which is accounted for using the equity method of
accounting.

Revenue Recognition--Tower and sublease revenues are recognized when earned
over the lease terms. Management fee revenues are recognized when earned over
the terms of the management contracts. Deferred revenue represents advance
payments by customers where related revenue is recognized when services are
provided.

S Corporation Election--The accompanying financial statements do not include
any provision for federal or state income taxes since the Company is treated
as a partnership under Subchapter S of the Internal Revenue Code and under
similar state income tax provisions. Accordingly, income or loss is allocated
to the shareholders and included in their tax returns.

Retirement Plan--Employees of the Company are eligible for participation in
a 401-K plan managed by the Company, subject to certain minimum age and
length-of-employment requirements. Under the plan, the Company does not match
the participants' contributions.

F-41
<PAGE>

DIABLO COMMUNICATIONS, INC.
(A CALIFORNIA S CORPORATION)

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997
IS UNAUDITED)

2. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------- SEPTEMBER 30,
1995 1996 1997
---------- ---------- -------------
(UNAUDITED)
<S> <C> <C> <C>
Land and improvements................ $ 674,574 $1,017,949 $1,135,034
Towers............................... 533,175 1,342,178 1,543,206
Technical equipment.................. 387,451 508,212 510,097
Office equipment, furniture, fixtures
and other equipment................. 378,290 478,285 506,172
Construction in progress............. 209,592 473,163 631,241
---------- ---------- ----------
Total.............................. 2,183,082 3,819,787 4,325,750
Less accumulated depreciation and am-
ortization.......................... (462,659) (866,861) (1,333,157)
---------- ---------- ----------
Property and equipment, net.......... $1,720,423 $2,952,926 $2,992,593
========== ========== ==========
</TABLE>

Technical and office equipment include assets under capital leases of
$285,749, $285,749 and $288,698 at September 30, 1997, December 31, 1996 and
1995, respectively with related accumulated depreciation of $223,980, $199,588
and $167,065, respectively.

3. LONG-TERM DEBT

Outstanding amounts under the Company's financing arrangements consisted of
the following:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------- SEPTEMBER 30,
1995 1996 1997
---------- ---------- -------------
(UNAUDITED)
<S> <C> <C> <C>
Advances on bank term loan approved up
to $1,500,000, varying interest rates
at 9.44% to 9.85%.................... $1,250,000 $1,250,000
Notes payable to banks at interest
rates of prime plus 1.5%............. $ 858,333 658,333 525,000
Other notes payable to banks.......... 212,107 202,302 419,377
Capital lease obligations............. 157,607 96,650 43,142
---------- ---------- ----------
Total............................... 1,228,047 2,207,285 2,237,519
Less scheduled current maturities..... (303,045) (420,875) (505,129)
---------- ---------- ----------
Long-term debt........................ $ 925,002 $1,786,410 $1,732,390
========== ========== ==========
</TABLE>

In October 1997, the Company's long-term debt was either assumed by ATS or
repaid by the Company with proceeds from the sale of assets to ATS (see Note
1--"Sale of the Company").

F-42
<PAGE>

DIABLO COMMUNICATIONS, INC.
(A CALIFORNIA S CORPORATION)

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997
IS UNAUDITED)

4. COMMITMENTS AND CONTINGENCIES

The Company leases various technical and office equipment under capital
leases and certain office space and other real property under noncancelable
operating leases. Future minimum lease payments under these operating and
capital leases are as follows:

<TABLE>
<CAPTION>
OPERATING CAPITAL
LEASES LEASES
---------- --------
<S> <C> <C>
Year ending December 31:
1997................................................ $ 662,260 $ 73,529
1998................................................ 613,607 31,161
1999................................................ 608,642
2000................................................ 567,817
2001................................................ 510,557
Thereafter.......................................... 2,808,872
---------- --------
Total............................................. $5,771,755 104,690
==========
Less interest portion................................... (8,040)
--------
Present value of minimum lease payments................. $ 96,650
========
</TABLE>

5. RELATED PARTY TRANSACTIONS

New Loma Communications, Inc., is a corporation in which the Company owns
25% of the outstanding capital stock.

Drake Industrial Park, Inc. and Diablo Communications of Southern
California, Inc. are corporations under common ownership as that of the
Company.

During the nine months ended September 30, 1996 and 1997 and the years ended
December 31, 1995 and 1996, the Company received income from New Loma
Communications, Inc., as follows:

<TABLE>
<CAPTION>
YEARS ENDED NINE MONTHS ENDED
DECEMBER 31, SEPTEMBER 30,
----------------- -----------------
1995 1996 1996 1997
-------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C>
Sublease revenues........................ $414,000 $365,500 $253,500 $337,940
Management services...................... 96,968 97,513 70,531 80,621
-------- -------- -------- --------
Total.................................. $510,968 $463,013 $324,031 $418,561
======== ======== ======== ========
</TABLE>

The Company had the following accounts receivable from affiliates:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------- SEPTEMBER 30,
1995 1996 1997
-------- -------- -------------
(UNAUDITED)
<S> <C> <C> <C>
Diablo Communications of Southern Califor-
nia, Inc................................. $391,872 $517,400 $1,214,622
New Loma Communications................... 48,660 27,859 176
Drake Industrial Park, Inc................ 15,554 17,154
-------- -------- ----------
Total................................... $440,532 $560,813 $1,231,952
======== ======== ==========
</TABLE>

F-43
<PAGE>

DIABLO COMMUNICATIONS, INC.
(A CALIFORNIA S CORPORATION)

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997
IS UNAUDITED)

6. SPIN-OFF OF SOUTHERN CALIFORNIA OPERATION--NONCASH DISTRIBUTION TO
STOCKHOLDERS

In order to establish a separate company under which to conduct Southern
California business, on September 1, 1995, all of the Company's Southern
California communication site leases, customer contracts, affiliated
receivables, communication site equipment, vehicles, vehicle obligations,
office lease and contracts, and office equipment were distributed to the
Company's stockholders at net book value according to their pro rata
ownership. The net book value of such distribution was $450,921.

The Company's 1995 statement of income includes a net loss from the Southern
California operations of $318,291 for the eight months ended August 31, 1995.

7. MT. DIABLO COMMUNICATION SITE DAMAGE

On December 12, 1995, a severe wind destroyed the tower at the Company's Mt.
Diablo communication facility. The Company received insurance proceeds
totalling approximately $434,000 in 1996. Of these proceeds, $126,000 was
capitalized in property and equipment, $213,000 was recorded as revenue and
$95,000 was recorded as a reduction of operating expenses.

8. FUTURE LEASE INCOME

The Company has long-term, non-cancelable agreements under operating leases
for license fee income. Future minimum annual lease income at December 31,
1996 is as follows:

<TABLE>
<S> <C>
Year ending December 31:
1997..................................................... $ 3,263,693
1998..................................................... 2,786,793
1999..................................................... 1,935,638
2000..................................................... 1,493,622
2001..................................................... 964,394
Thereafter............................................... 593,206
-----------
Total.................................................. $11,037,346
===========
</TABLE>

F-44
<PAGE>

INDEPENDENT AUDITORS' REPORT

The Board of Directors
Diablo Communications of Southern California, Inc.

We have audited the balance sheets of Diablo Communications of Southern
California, Inc. (a California S Corporation) (the "Company") as of December
31, 1995 and December 31, 1996 and the related statements of operations,
stockholders' equity and cash flows for the period from September 1, 1995
(inception) to December 31, 1995 and for the year ended December 31, 1996.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit of the financial statements
provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above, present fairly,
in all material respects, the financial position of Diablo Communications of
Southern California, Inc. as of December 31, 1995 and December 31, 1996, and
the results of its operations and its cash flows for the period from September
1, 1995 (inception) to December 31, 1995 and the year ended December 31, 1996
in conformity with generally accepted accounting principles.

As emphasized in Note 9 to the financial statements, during October 1997,
the Company sold substantially all of its assets to an outside party.

Rooney, Ida, Nolt & Ahern
Certified Public Accountants

Oakland, California
February 7, 1997
October 9, 1997 as to note 9
to the financial statements

F-45
<PAGE>

DIABLO COMMUNICATIONS OF SOUTHERN CALIFORNIA, INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------- SEPTEMBER 30,
1995 1996 1997
--------- ----------- -------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash................................... $ 204,781 $ 61,043 $ 15,094
Accounts receivable, trade............. 7,591 27,245 12,914
Prepaid expenses....................... 1,272 2,462 24,990
--------- ----------- -----------
Total current assets................. 213,644 90,750 52,998
--------- ----------- -----------
PROPERTY AND EQUIPMENT--net.............. 441,105 1,013,434 1,667,418
--------- ----------- -----------
OTHER ASSETS:
Prepaid expenses--net.................. 2,348 7,970 6,468
Deposits............................... 6,976 10,776 11,146
--------- ----------- -----------
Total other assets................... 9,324 18,746 17,614
--------- ----------- -----------
TOTAL.................................... $ 664,073 $ 1,122,930 $ 1,738,030
========= =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIENCY)
CURRENT LIABILITIES:
Notes and contracts payable............ $ 283,544 $ 310,522 $ 382,494
Accounts payable....................... 148,438 447,232 1,242,179
Customer fees advanced................. 1,707 12,839 17,426
Accrued liabilities.................... 5,419 16,023 11,634
--------- ----------- -----------
Total current liabilities............ 439,108 786,616 1,653,733
--------- ----------- -----------
LONG-TERM DEBT........................... 21,139 930,617 1,065,417
--------- ----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIENCY):
Common stock, no par value, 10,000,000
shares authorized, 1,000,000 issued
and outstanding....................... 450,921 450,921 450,921
Accumulated deficit.................... (247,095) (1,045,224) (1,432,041)
--------- ----------- -----------
Total stockholders' equity
(deficiency)........................ 203,826 (594,303) (981,120)
--------- ----------- -----------
TOTAL.................................... $ 664,073 $ 1,122,930 $ 1,738,030
========= =========== ===========
</TABLE>

See notes to financial statements.

F-46
<PAGE>

DIABLO COMMUNICATIONS OF SOUTHERN CALIFORNIA, INC.

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
SEPTEMBER 1, NINE MONTHS ENDED
(INCEPTION) TO YEAR ENDED SEPTEMBER 30,
DECEMBER 31, DECEMBER 31, -----------------------
1995 1996 1996 1997
-------------- ------------ ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
NET REVENUES............... $ 45,445 $ 408,555 $ 251,733 $ 660,195
OPERATING EXPENSES:
Operating expenses,
excluding depreciation
and amortization and
corporate general and
administrative
expenses................ 49,488 319,011 196,377 402,945
Depreciation and
amortization............ 8,459 29,405 22,123 32,886
Corporate general and
administrative.......... 226,528 776,063 604,853 500,014
--------- ---------- --------- ---------
Total operating
expenses.............. 284,475 1,124,479 823,353 935,845
--------- ---------- --------- ---------
OPERATING LOSS............. (239,030) (715,924) (571,620) (275,650)
--------- ---------- --------- ---------
OTHER INCOME (EXPENSES):
Interest expense......... (8,656) (85,911) (54,096) (113,643)
Interest income.......... 1,391 4,506 3,461 3,276
--------- ---------- --------- ---------
Total other income
(expenses)............ (7,265) (81,405) (50,635) (110,367)
--------- ---------- --------- ---------
LOSS FROM OPERATIONS BEFORE
INCOME TAXES.............. (246,295) (797,329) (622,255) (386,017)
INCOME TAX PROVISION....... 800 800 800 800
--------- ---------- --------- ---------
NET LOSS................... $(247,095) $ (798,129) $(623,055) $(386,817)
========= ========== ========= =========
</TABLE>

See notes to financial statements.

F-47
<PAGE>

DIABLO COMMUNICATIONS OF SOUTHERN CALIFORNIA, INC.

STATEMENT OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
ACCUMULATED
COMMON STOCK DEFICIT TOTAL
------------ ----------- ---------
<S> <C> <C> <C>
BALANCES, SEPTEMBER 1, 1995 (inception)... $450,921 $ -0- $ 450,921
Net loss................................ (247,095) (247,095)
-------- ----------- ---------
BALANCES, DECEMBER 31, 1995............... 450,921 (247,095) 203,826
Net loss................................ (798,129) (798,129)
-------- ----------- ---------
BALANCES, DECEMBER 31, 1996............... 450,921 (1,045,224) (594,303)
Net loss (unaudited).................... (386,817) (386,817)
-------- ----------- ---------
BALANCES, SEPTEMBER 30, 1997.............. $450,921 $(1,432,041) $(981,120)
======== =========== =========
</TABLE>

See notes to financial statements.

F-48
<PAGE>

DIABLO COMMUNICATIONS OF SOUTHERN CALIFORNIA, INC.

STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
SEPTEMBER 1 NINE MONTHS ENDED
(INCEPTION) TO YEAR ENDED SEPTEMBER 30,
DECEMBER 31, DECEMBER 31, -----------------------
1995 1996 1996 1997
-------------- ------------ ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss.................. $(247,095) $ (798,129) $(623,055) $(386,817)
--------- ---------- --------- ---------
Adjustments to reconcile
net loss to cash used by
operating activities:
Depreciation and
amortization............ 8,459 29,405 21,517 32,886
Changes in assets and
liabilities:
Accounts receivable.... (7,591) (19,654) (23,386) 14,331
Prepaid expenses....... (1,151) (1,190) (4,129) (22,528)
Deposits............... (4,096) (3,800) (3,800) (370)
Accounts payable and
accrued expenses...... 153,857 309,398 119,535 790,558
Customer fees
advanced.............. 1,707 11,132 (1,707) 4,587
--------- ---------- --------- ---------
Total adjustments........ 151,185 325,291 108,030 819,464
--------- ---------- --------- ---------
Cash provided (used) by
operating activities...... (95,910) (472,838) (515,025) 432,647
--------- ---------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Collection on note
receivable.............. 81,310
Purchase of property and
equipment............... (50,449) (599,856) (371,191) (685,368)
Organization costs....... (2,516)
Loan fees................ (7,500) (7,500)
--------- ---------- --------- ---------
Cash provided (used) by
investing activities...... 28,345 (607,356) (378,691) (685,368)
--------- ---------- --------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from debt....... 275,000 1,000,000 750,000 248,751
Repayment of debt........ (2,654) (63,544) (47,523) (41,979)
--------- ---------- --------- ---------
Cash provided by financing
activities................ 272,346 936,456 702,477 206,772
--------- ---------- --------- ---------
INCREASE (DECREASE) IN
CASH...................... 204,781 (143,738) (191,239) (45,949)
CASH, BEGINNING OF PERIOD.. -0- 204,781 204,781 61,043
--------- ---------- --------- ---------
CASH, END OF PERIOD........ $ 204,781 $ 61,043 $ 13,542 $ 15,094
========= ========== ========= =========
</TABLE>

See notes to financial statements.

F-49
<PAGE>

DIABLO COMMUNICATIONS OF SOUTHERN CALIFORNIA, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Nature of business:

The Company develops and operates telecommunications sites in Southern
California. The Company has a broad customer base which includes specialized
mobile radio companies, paging companies, cellular telephone providers,
broadcasters, emergency services, various private and governmental two-way
radio users, and other entities with wireless communications needs.

Revenues are generated primarily from individual license agreements which
entitle a customer to use an antenna system or antenna tower space, and to use
on-site space in a climate controlled building for their transmitters,
receivers, and related equipment.

For most of its sites, the Company holds a long-term lease interest. As a
recognized full service site manager, the Company also manages sites for
outside site owners.

Allowances for doubtful accounts:

The Company uses the allowance method for accounting for bad debts. An
allowance for bad debts has not been provided currently since the Company's
bad debt experience indicates that the amount would not be material.

Leases:

Leases meeting certain criteria are treated as capital leases requiring
related assets and lease obligations to be recorded at their present value in
the financial statements. Other leases, not qualifying under these criteria,
are treated as operating leases for which rentals are charged to expense.

S Corporation election:

The Company has elected, by unanimous consent of its stockholders, to have
its income taxed directly to the stockholders. Accordingly, provision for
income taxes, except for an $800 minimum state franchise taxes, has not been
made. Deferred income taxes have not been recorded because such amounts are
immaterial.

Property and equipment:

Property and equipment are recorded at cost and depreciation is computed
using a combination of straight-line and accelerated methods of accounting
over useful lives of 5 to 15 years.

Organization costs and loan fees:

Organization costs and loan fees are amortized using the straight-line
method of accounting over 5 years.

Unaudited interim financial information:

In the opinion of management, the financial statements for the unaudited
periods presented include all adjustments necessary for a fair presentation in
accordance with generally accepted accounting principles, consisting solely of
normal recurring accruals and adjustments. The results of operations and cash
flows for the nine months ended September 30, 1996 and September 30, 1997 are
not necessarily indicative of results which would be expected for a full year.

F-50
<PAGE>

DIABLO COMMUNICATIONS OF SOUTHERN CALIFORNIA, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

Use of estimates:

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of disclosures. Accordingly,
actual results could differ from those estimates.

Concentration of Credit Risk:

The Company extends credit to customers on an unsecured basis in the normal
course of business. No individual customer is significant to the Company's
customer base. The Company has policies governing the extension of credit and
collection of amounts due from customers.

Recognition of Revenues:

Tower and sublease revenues are recognized when earned over the lease terms.
Management fee revenues are recognized when earned over the terms of the
management contracts.

Corporate general and administrative expenses:

Corporate general and administrative expenses consists of corporate overhead
costs not specifically allocable to any of the Company's direct operating
profit centers.

Impairment of long-lived assets:

In accordance with Statement of Financial Accounting Standards No. 121
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed of ", the company assesses on an on-going basis the
recoverability of intangible assets based on estimates of future undiscounted
cash flows for the applicable business acquired compared to net book value. If
the future undiscounted cash flow estimate is less than net book value, net
book value is then reduced to the undiscounted cash flow estimate. The Company
also evaluates the amortization periods of intangible assets to determine
whether events or circumstances warrant revised estimates of useful lives. As
of September 30, 1997, management believes that no revisions to the remaining
useful lives or writedowns of deferred charges are required.

Fair value of financial instruments:

The Company believes that the carrying value of all financial instruments is
a reasonable estimate of fair value as of December 31, 1996 and September 30,
1997.

Retirement plan:

Employees of the Company, through its affiliate Diablo Communications, Inc.,
are eligible for participation in a 401(k) plan, subject to certain minimum
age and length-of-employment requirements. The plan does not provide for any
Company contributions.

Supplemental cash flow information:

For financial statement purposes of the statements of cash flows, the
Company issued capital stock in exchange for $450,921 in net assets, primarily
property and equipment on September 1, 1995.

Cash payments for interest approximated $8,656, $71,256, $50,653 and
$116,663 for period September 1, 1995 to December 31, 1995, for the year ended
December 31, 1996 and the nine months ended September 30, 1996 and 1997,
respectively.

F-51
<PAGE>

DIABLO COMMUNICATIONS OF SOUTHERN CALIFORNIA, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

Cash payments for income taxes was $800 for the period September 1, 1995 to
December 31, 1995, for the year ended December 31, 1996 and the nine months
ended September 30, 1996 and 1997, respectively.

NOTE 2. COMPANY ORGANIZATION:

In order to establish a separate company under which to conduct business in
Southern California, on September 1, 1995, Diablo Communications, Inc.
distributed all of its Southern California communication site leases, customer
contracts, affiliated receivables, communication site equipment, vehicles,
vehicle obligations, office lease and contracts, and office equipment to its
stockholders according to their pro rata ownership. The stockholders then
contributed these assets in exchange for 1,000,000 shares of capital stock.
The net value of this contribution was $450,921.

NOTE 3. PROPERTY AND EQUIPMENT:

Property and equipment consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------- SEPTEMBER 30,
1995 1996 1997
-------- ---------- -------------
(UNAUDITED)
<S> <C> <C> <C>
Land improvements.......................... $ 8,276 $ 48,770 $ 48,770
Towers and wiring.......................... 6,261 31,815 205,269
Equipment.................................. 19,190 26,477 26,477
Office furniture and equipment............. 27,729 27,729 27,729
Computers and software..................... 23,718 24,746 24,746
Vehicles................................... 27,546 27,546 27,546
Construction in progress................... 355,276 880,769 1,392,684
-------- ---------- ----------
Total.................................... 467,996 1,067,852 1,753,221
-------- ---------- ----------
Less accumulated depreciation............ 26,891 54,418 85,803
-------- ---------- ----------
Property and equipment, net.............. $441,105 $1,013,434 $1,667,418
======== ========== ==========
</TABLE>

NOTE 4. RELATED PARTY TRANSACTIONS:

Richard D. Spight and the Mary C. Spight Family Trust are the majority
stockholders of Diablo Communications of Southern California, Inc. and Diablo
Communications, Inc.

At the end of each period, the Company owed the following amounts to Diablo
Communications, Inc:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------- SEPTEMBER 30,
1995 1996 1997
-------- -------- -------------
(UNAUDITED)
<S> <C> <C> <C>
Note payable at 8.68%....................... $275,000 $220,000 $ 183,333
Accounts payable............................ 116,872 297,400 1,214,622
</TABLE>

After the sale of the Company's assets on October 9, 1997, these related
note and accounts payable were paid in full.

Interest expense on this related party note payable was $4,776, $22,424,
$17,335 and $13,290 for the period September 30, 1995 (inception) to December
31, 1995, year ended December 31, 1996 and for the nine month periods ended
September 30, 1996 and September 30, 1997, respectively.

F-52
<PAGE>

DIABLO COMMUNICATIONS OF SOUTHERN CALIFORNIA, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

NOTE 5. NOTES PAYABLE:

The Company has taken advances against a bank term loan approved for
$1,500,000. The Company pays interest only on the advances at rates ranging
from 9.44% to 9.85%. The line of credit requires that certain financial
covenants be maintained. The note is secured by a blanket lien on all of the
Company's assets.

During March 1997, the Company entered into an unsecured credit agreement
with American Tower Systems, Inc., that provides the Company with a $650,000
unsecured loan commitment of which $248,751 was outstanding at September 30,
1997. The Company pays interest only on the advances at prime, currently 8.5%.
The note matures at the earlier of consummation of the sale or June 30, 2000.

The Company repaid all advances on both of these notes after the sale of
substantially all its assets.

NOTE 6. LONG-TERM DEBT:

Maturities of long-term debt for the years subsequent to December 31, 1996,
are as follows:

<TABLE>
<CAPTION>
YEAR ENDING
DECEMBER 31,
------------
<S> <C>
1997.......................................................... $ 87,689
1998.......................................................... 204,759
1999.......................................................... 205,199
2000.......................................................... 201,841
2001.......................................................... 200,000
Thereafter..................................................... 116,666
----------
Totals........................................................ $1,016,154
==========
</TABLE>

NOTE 7. COMMITMENTS:

Capital leases:

The future minimum lease payments under capital leases for communications
equipment and certain office equipment in effect at December 31, 1996 are as
follows:

<TABLE>
<CAPTION>
YEAR ENDING
DECEMBER 31,
------------
<S> <C>
1997............................................................ $ 3,422
1998............................................................ 2,282
-------
Total........................................................... 5,704
Less interest portion........................................... 719
-------
Present value of minimum lease payments......................... 4,985
Less current installments....................................... 2,833
-------
Long-term obligations under capital leases...................... $ 2,152
=======
Cost of equipment under capital leases.......................... $12,946
Less accumulated depreciation to December 31, 1996.............. 7,625
-------
Net............................................................. $ 5,321
=======
Current depreciation expense.................................... $ 2,129
=======
</TABLE>

F-53
<PAGE>

DIABLO COMMUNICATIONS OF SOUTHERN CALIFORNIA, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

Operating leases:

At December 31, 1996, the Company was liable for various leases of office
space and other real and personal property which require future minimum annual
rental payments as follows:

<TABLE>
<CAPTION>
YEAR ENDING
DECEMBER 31,
------------
<S> <C>
1997............................... $231,937
1998............................... 211,661
1999............................... 216,298
2000............................... 193,998
2001............................... 62,950
Thereafter.......................... -0-
--------
Total.............................. $916,844
========
</TABLE>

In addition, the Company is liable for various real property leases based on
percentages of gross income ranging from 25% to 70%.

Rental expenses for these operating leases were $35,611, $271,419, $173,407
and $344,987, for the period September 1, 1995 (inception) to December 31,
1995, the year ended December 31, 1996 and for the nine month periods ended
September 30, 1996 and September 30, 1997, respectively.

NOTE 8. FUTURE LEASE INCOME:

At December 31, 1996, the Company has long-term, non-cancelable agreements
under operating-type leases for license fee income. Future minimum annual
lease income is as follows:

<TABLE>
<CAPTION>
YEAR ENDING
DECEMBER 31,
------------
<S> <C>
1997............................. $ 659,445
1998............................. 585,155
1999............................. 434,161
2000............................. 287,430
2001............................. 193,657
Thereafter........................ -0-
----------
Total............................ $2,159,848
==========
</TABLE>

NOTE 9. SUBSEQUENT EVENT:

On October 9, 1997 the Company, along with Diablo Communications, Inc., a
related company, sold substantially all of its assets to American Tower
Systems, Inc. (ATS) for a combined purchase price of approximately $46.5
million. DCSC's allocable share of the purchase price is approximately $5.4
million. Some of DCSC's liabilities were included in the transaction.

F-54
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Board of Directors, Stockholders and Partners of
Meridian Communications
Calabasas, California:

We have audited the accompanying combined balance sheets of Meridian
Communications (the "Company") as of December 31, 1995 and 1996, and the
related combined statements of income, partners' capital and stockholders'
equity, and cash flows for the years then ended. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

In our opinion, such combined financial statements present fairly, in all
material respects, the financial position of the Company as of December 31,
1995 and 1996, and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting principles.

/s/ Deloitte & Touche LLP

Deloitte & Touche LLP
Long Beach, California
October 31, 1997

F-55
<PAGE>

MERIDIAN COMMUNICATIONS

COMBINED BALANCE SHEETS

DECEMBER 31, 1995 AND 1996 AND JUNE 30, 1997

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------- JUNE 30,
1995 1996 1997
---------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents.................. $ 30,897 $ 63,665 $ 21,168
Accounts receivable:
Trade, net of allowance for doubtful ac-
counts of $1,244 and $10,118 in 1995 and
1996, respectively, and $17,720 (unau-
dited) at June 30, 1997................... 60,961 80,190 103,709
Other accounts receivable (Note 8)......... 19,461 25,889 2,260,295
Prepaid expenses and other current assets.. 79,044 77,108 122,366
---------- ---------- ----------
Total current assets..................... 190,363 246,852 2,507,538
PROPERTY AND EQUIPMENT, Net (Note 2)......... 2,523,929 2,917,751 3,147,692
INTANGIBLES, Net............................. 22,000 141,948 112,292
OTHER ASSETS................................. 1,859 2,259 6,299
---------- ---------- ----------
TOTAL........................................ $2,738,151 $3,308,810 $5,773,821
========== ========== ==========
LIABILITIES AND PARTNERS' CAPITAL AND
STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
Current maturities of long-term loans pay-
able to shareholder and partner (Note 7).. $ 119,121 $ 234,607 $ 477,388
Accounts payable and accrued expenses...... 175,627 182,441 286,803
Security and other deposits................ 128,208 231,154 131,611
---------- ---------- ----------
Total current liabilities................ 422,956 648,202 895,802
---------- ---------- ----------
LONG-TERM LOANS PAYABLE TO SHAREHOLDER AND
PARTNER (Note 7)............................ 553,533 1,012,681 918,808
DEFERRED REVENUE............................. 214,918 279,641 186,413
COMMITMENTS AND CONTINGENCIES (Note 3)
PARTNERS' CAPITAL AND STOCKHOLDERS' EQUITY:
Common stock; $1.00 par value; 75,000
shares authorized; 4,000 shares issued and
outstanding............................... 4,000 4,000 4,000
Additional paid-in capital................. 16,632 16,632 16,632
Partners' capital.......................... 631,690 507,245 2,734,202
Retained earnings.......................... 894,422 840,409 1,017,964
---------- ---------- ----------
Total partners' capital and stockholders'
equity.................................. 1,546,744 1,368,286 3,772,798
---------- ---------- ----------
TOTAL........................................ $2,738,151 $3,308,810 $5,773,821
========== ========== ==========
</TABLE>

See accompanying notes to combined financial statements.

F-56

<PAGE>

MERIDIAN COMMUNICATIONS

COMBINED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1995 AND 1996 AND SIX MONTHS ENDED JUNE 30, 1996 AND
1997

<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31, SIX MONTHS ENDED JUNE 30,
---------------------- --------------------------
1995 1996 1996 1997
---------- ---------- ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C>
REVENUES:
Site use................. $3,918,420 $4,165,919 $ 2,103,614 $ 2,278,612
Site management.......... 72,337 125,348 51,355 52,178
Repeater service......... 140,945 206,556 67,319 54,087
---------- ---------- ------------ ------------
Total revenues......... 4,131,702 4,497,823 2,222,288 2,384,877
EXPENSES:
Operating expenses,
excluding depreciation
and amortization........ 3,034,285 3,217,369 1,543,333 1,730,211
Depreciation and
amortization............ 303,197 416,369 202,154 210,983
---------- ---------- ------------ ------------
OPERATING INCOME........... 794,220 864,085 476,801 443,683
OTHER INCOME (EXPENSE):
Interest and other income
(expense)............... 5,155 3,581 23,311 (17,741)
Interest expense to
shareholder and
partner (Note 6)........ (36,111) (73,126) (36,712) (61,968)
Gain on sale of business
(Note 8)................ 3,080,563
---------- ---------- ------------ ------------
Total other income (ex-
pense)................ (30,956) (69,545) (13,401) 3,000,854
---------- ---------- ------------ ------------
INCOME BEFORE INCOME TAX-
ES........................ 763,264 794,540 463,400 3,444,537
INCOME TAXES............... 800 800 3,145 2,526
---------- ---------- ------------ ------------
NET INCOME................. $ 762,464 $ 793,740 $ 460,255 $ 3,442,011
========== ========== ============ ============
</TABLE>

See accompanying notes to combined financial statements.

F-57
<PAGE>

MERIDAN COMMUNICATIONS

COMBINED STATEMENTS OF PARTNERS' CAPITAL AND STOCKHOLDERS' EQUITY

YEARS ENDED DECEMBER 31, 1995 AND 1996 AND SIX MONTHS ENDED JUNE 30, 1997

<TABLE>
<CAPTION>
ADDITIONAL
COMMON PAID-IN PARTNERS' RETAINED
STOCK CAPITAL CAPITAL EARNINGS TOTAL
------ ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31,
1994................... $4,000 $16,632 $ 630,902 $ 987,093 $ 1,638,627
Net income (loss)....... 855,135 (92,671) 762,464
Cash distributions...... (854,347) (854,347)
------ ------- ----------- ---------- -----------
BALANCE, DECEMBER 31,
1995................... 4,000 16,632 631,690 894,422 1,546,744
Net income (loss)....... 847,753 (54,013) 793,740
Cash distributions...... (972,198) (972,198)
------ ------- ----------- ---------- -----------
BALANCE, DECEMBER 31,
1996................... 4,000 16,632 507,245 840,409 1,368,286
Net income (Unaudited).. 3,264,456 177,555 3,442,011
Cash distributions (Un-
audited)............... (1,037,499) (1,037,499)
------ ------- ----------- ---------- -----------
BALANCE, JUNE 30, 1997
(Unaudited)............ $4,000 $16,632 $ 2,734,202 $1,017,964 $ 3,772,798
====== ======= =========== ========== ===========
</TABLE>

See accompanying notes to combined financial statements.

F-58
<PAGE>

MERIDIAN COMMUNICATIONS

COMBINED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 1995 AND 1996 AND SIX MONTHS ENDED JUNE 30, 1996 AND
1997

<TABLE>
<CAPTION>
YEARS ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30,
---------------------- ----------------------
1995 1996 1996 1997
---------- ---------- --------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING AC-
TIVITIES:
Net income.................... $ 762,464 $ 793,740 $ 460,255 $ 3,442,011
Adjustments to reconcile net
income to net cash
provided by operating activi-
ties:
Depreciation and amortiza-
tion......................... 303,197 416,369 202,154 210,983
Provision for doubtful ac-
counts....................... (907) 8,874 1,955 7,748
Loss (gain) on disposal of
property and equipment....... 7,315 8,954 (2,922,335)
Changes in operating assets
and liabilities:
Accounts receivable--trade... 45,358 (28,108) (5,500) (31,266)
Accounts receivable--other... 10,136 (6,428) 11,962 15,594
Prepaid expenses and other
current assets.............. (23,359) 1,936 (76,357) (45,258)
Other assets................. (59) (400) (4,200) (4,040)
Accounts payable and accrued
expenses.................... 47,801 (23,185) 255,826 153,552
Security and other depos-
its......................... 9,679 2,946 (400) 457
Deferred revenue............. 28,628 64,723 5,500 (93,228)
---------- ---------- --------- -----------
Net cash provided by operat-
ing activities............. 1,182,938 1,237,782 860,149 734,218
---------- ---------- --------- -----------
CASH FLOWS FROM INVESTING AC-
TIVITIES:
Purchase of property and
equipment.................... (716,932) (857,562) (312,264) (508,699)
Proceeds from sale of property
and equipment................ 42,609 29,175 750,575
Purchase of intangibles....... (122,500)
Receipt of deposits for re-
peater services.............. 130,000
Application of deposits for
repeater services............ (130,000)
---------- ---------- --------- -----------
Net cash provided by (used
in) investing activities... (716,932) (807,453) (283,089) 111,876
---------- ---------- --------- -----------
CASH FLOWS FROM FINANCING AC-
TIVITIES:
Borrowings from shareholder
and partner.................. 400,000 655,000 100,000 219,000
Repayments on loans from
shareholder and partner...... (37,346) (80,366) (26,432) (70,092)
Cash distributions............ (854,347) (972,195) (486,101) (1,037,499)
---------- ---------- --------- -----------
Net cash provided by (used
in) financing activities... (491,693) (397,561) (412,533) (888,591)
---------- ---------- --------- -----------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS.............. (25,687) 32,768 164,527 (42,497)
CASH AND CASH EQUIVALENTS, BE-
GINNING OF PERIOD............. 56,584 30,897 30,897 63,665
---------- ---------- --------- -----------
CASH AND CASH EQUIVALENTS, END
OF PERIOD..................... $ 30,897 $ 63,665 $ 195,424 $ 21,168
========== ========== ========= ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION--
Cash paid during the period
for:
Interest...................... $ 36,111 $ 72,673 $ 13,087 $ 33,168
Income taxes.................. $ 0 $ 900 $ 900 $ 800
</TABLE>

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
-- During December 1996, the Company acquired equipment by incurring accrued
expenses in the amount of $19,191.
-- During February 1997, the Company received a non-trade account receivable
in the amount of $2,250,000 from the sale of a repeater system.

See accompanying notes to combined financial statements.

F-59
<PAGE>

MERIDIAN COMMUNICATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 1995 AND 1996 AND SIX MONTHS ENDED JUNE 30, 1996 AND
1997
(INFORMATION PERTAINING TO THE SIX MONTHS ENDED JUNE 30, 1996 AND 1997 IS
UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General--The combined financial statements include the accounts of Meridian
Sales and Services Company ("MSSC"), a California S corporation, Meridian
Communications North ("MCN"), a general partnership, and Meridian Radio Sites
("MRS"), a general partnership (referred to collectively as Meridian
Communications or the "Company") which share common ownership and management.
All significant intercompany balances and transactions have been eliminated in
combination.

Meridian Communications develops and manages telecommunication antenna site
facilities and repeater (mobile relay) equipment throughout Southern
California.

Cash and Cash Equivalents--Cash and cash equivalents include cash in the
bank as well as short-term investments with an original maturity of three
months or less.

Use of Estimates--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Property and Equipment--Property and equipment are stated at cost less
accumulated depreciation. Major renewals or betterments are capitalized and
depreciated over their estimated useful lives. Repairs and maintenance are
charged to expense in the period incurred.

Depreciation for financial statements purposes is computed using the
straight-line method over the estimated useful lives of the assets. Buildings
and leasehold improvements are depreciated over a period of 20 years, antenna
site equipment over a period of 7 years, and office furniture, equipment, and
automobiles over a period of 5 years.

Intangibles--Intangible assets are primarily comprised of the rights to a
site lease acquired in 1996 and, to a lesser extent, an FCC license. The FCC
license was sold in February 1997 with the sale of the assets used in
connection with the repeater business for $3,000,000 (see Note 8). The site
lease rights are amortized on a straightline basis over the remainder of the
lease term of 8 years.

F-60
<PAGE>

MERIDIAN COMMUNICATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION PERTAINING TO THE SIX MONTHS ENDED JUNE 30, 1996 AND 1997 IS
UNAUDITED)

Long-Lived Assets--The Company records impairment losses on long-lived
assets when events and circumstances indicate that the assets might be
impaired and the undiscounted cash flows estimated to be generated by those
assets are less than the carrying amounts of those assets.

Concentration of Credit Risk--The Company performs ongoing credit evaluation
of its customers' financial condition and generally requires a one-month
security deposit from its customers. As of December 31, 1996, the Company had
no significant concentrations of credit risk.

Revenue Recognition and Deferred Revenue--Revenue is recorded when services
are provided, according to rates set forth in customer contracts. Deferred
revenue is recorded when services are paid in advance of performance.

Income Taxes--The Company is comprised of an S corporation and two
partnerships for federal and state income tax purposes. The stockholders and
partners report any income or loss of the Company directly on their personal
tax returns. State income tax expense is computed using statutory tax rates
applicable to S corporations.

Interim Financial Statements--The accompanying combined balance sheet as of
June 30, 1997 and the combined statements of income, partners' capital and
stockholders' equity, and cashflows for the six months ended June 30, 1997 and
1996 are unaudited. In the opinion of management, such unaudited financial
statements include all adjustments necessary to present fairly the information
set forth therein. These adjustments consist of normal recurring adjustments.
The results of operations for such interim periods are not necessarily
indicative of results for the full year.

2. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------- JUNE 30,
1995 1996 1997
----------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Land.............................. $ 28,839 $ 28,839 $ 28,839
Antenna site equipment............ 2,258,476 2,518,713 2,315,813
Buildings and leasehold improve-
ments............................ 1,767,261 1,793,290 1,793,290
Office furniture, equipment and
automobiles...................... 259,586 247,260 248,342
Construction in progress.......... 195,787 687,006 1,167,466
----------- ---------- -----------
4,509,949 5,275,108 5,553,750
Less accumulated depreciation and
amortization..................... (1,986,020) (2,357,357) (2,406,058)
----------- ---------- -----------
$ 2,523,929 $2,917,751 $ 3,147,692
=========== ========== ===========
</TABLE>

F-61
<PAGE>

MERIDIAN COMMUNICATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION PERTAINING TO THE SIX MONTHS ENDED JUNE 30, 1996 AND 1997 IS
UNAUDITED)

3. LEASE COMMITMENTS

The Company leases office and antenna site facilities under operating lease
agreements through the year 2009. One of the facilities is leased from a
shareholder of MSSC for $28,800 annually. This lease expires December 31,
1997. The Company is committed to minimum rental payments under leases
(exclusive of real estate taxes, maintenance and other related charges) at
December 31, 1996, as follows:

Years Ended December 31:
<TABLE>
<S> <C>
1997............................................................ $ 512,706
1998............................................................ 495,449
1999............................................................ 441,866
2000............................................................ 319,169
2001............................................................ 275,987
Thereafter...................................................... 2,100,576
----------
$4,145,753
==========
</TABLE>

Rent expense charged to operations for the years ended December 31, 1995 and
1996 amounted to $629,242 and $727,427, respectively, of which $20,400 and
$28,800, respectively, was paid to the shareholder. Rent expense charged to
operations for the six months ended June 30, 1996 and 1997 amounted to
$311,266 and $414,990, respectively, of which $14,400 was paid to the
shareholder in both periods.

4. INCOME TAXES

The Company's provision for income taxes for the years ended December 31,
1995 and 1996 consists of a minimum state liability of $800 for each year
which is assessed to MSSC.

The Company does not pay federal corporate income taxes on its taxable
income. Instead, the stockholders and partners are liable for individual
federal and state income taxes on their respective shares of the Company's
taxable income. The Corporation continues to pay a California surtax of 1.5%
of taxable income or the minimum state tax, whichever is greater.

5. PROFIT SHARING PLAN

MSSC has a profit sharing plan (the "Plan") which covers all employees who
have accumulated a minimum amount of hours of service during a year. MSSC's
contribution to the Plan is determined annually by the Board of Directors.
Provisions for contributions to the profit sharing plan of $22,578 and
$21,457, respectively, were made for the years ended December 31, 1995 and
1996.

Effective July 1, 1997, there will be no additional contributions to the
Plan. Additionally, the Plan will be terminated and all assets distributed to
the participants as defined in the Plan.

6. RELATED PARTY TRANSACTIONS

The Company engages in transactions with a shareholder and partner whereby
working capital funds are loaned to the Company and repaid over terms agreed
to by both parties (see Note 7). Interest expense incurred on these loans
amount to $36,111 and $73,126 for the years ended December 31, 1995 and 1996,
respectively, and $36,712 and $61,968 for the six months ended June 30, 1996
and 1997, respectively.

Certain of the Company's buildings and equipment are regularly repaired and
maintained by Lee's Two-Way Radio, a California corporation owned and
controlled by Norman Kramer, a general partner. Payments to Lee's Two-Way
Radio for the years ended December 31, 1995 and 1996 were $31,369 and $34,765,
respectively.

Payments for administrative services in the amount of $16,194 and $14,466
for the years ended December 31, 1995 and 1996, respectively, were paid to
Norman Kramer, a general partner.

F-62
<PAGE>

MERIDIAN COMMUNICATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION PERTAINING TO THE SIX MONTHS ENDED JUNE 30, 1996 AND 1997 IS
UNAUDITED)

7. LONG-TERM LOANS PAYABLE TO SHAREHOLDER AND PARTNER

<TABLE>
<CAPTION>
DECEMBER 31,
------------------- JUNE 30,
1995 1996 1997
-------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Unsecured loan payable to shareholder in the
original amount of $310,000, payable in sixty
monthly installments of $6,857, including
interest at the rate of 10% per annum. Final
installment is due March 31, 2000............ $272,654 $ 218,440 $ 189,240
Unsecured loan payable to shareholder in the
original amount of $400,000 at December 31,
1995 and increased to $500,000 during 1996,
payable in sixty monthly installments of
$10,624 per month, including interest at the
rate of 10% per annum. Final installment due
August 31, 2001.............................. 400,000 473,848 432,956
Unsecured loan payable to shareholder in the
original amount of $55,000, interest payable
at the rate of 10% per annum, due November
27, 2001..................................... 55,000 55,000
Unsecured loan payable to shareholder in the
original amount of $500,000, interest payable
at the rate of 10% per annum, due December
31, 2001..................................... 500,000 500,000
Unsecured temporary loans payable to share-
holder and partner, at the rate of 10% per
annum, payable upon demand................... 219,000
-------- ---------- ----------
672,654 1,247,288 1,396,196
Less current maturities....................... 119,121 234,607 477,388
-------- ---------- ----------
$553,533 $1,012,681 $ 918,808
======== ========== ==========
</TABLE>

All loans to the shareholder and partner were paid in full following the
sale of the Company's assets and business to ATS (see Note 9).

8. SALE OF THE REPEATER BUSINESS

Effective December 1, 1996, the Company entered into a ten-year agreement
with an unrelated party granting the party the right to manage a repeater
system and granting the party an option to purchase the system. Under the
agreement, the Company received a non-refundable $300,000 option fee in the
first quarter of 1997 from the party. In addition, the Company receives
repeater service fees quarterly from the party. As of June 30, 1997, the
system is still being managed by the party and the purchase option has not
been exercised.

Effective February 19, 1997, the Company sold a repeater system to an
unrelated party for $3,000,000. As of June 30, 1997, the uncollected portion
of the purchase price, $2,250,000, was included in non-trade accounts
receivable. This amount was received during August 1997.

Effective February 28, 1997, the balance of the repeater business was sold
to a separate buyer for the assumption of certain liabilities regarding the
business.

Revenues for the repeater business which were transferred as a result of
these transactions are $140,945, $206,556 and $54,087 for the years and period
ended December 31, 1995 and 1996, and June 30, 1997, respectively.

F-63
<PAGE>

MERIDIAN COMMUNICATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION PERTAINING TO THE SIX MONTHS ENDED JUNE 30, 1996 AND 1997 IS
UNAUDITED)

9. SUBSEQUENT EVENT (UNAUDITED)

Effective July 1, 1997, the Company sold substantially all of its assets and
the business related to these assets to American Tower Systems, Inc. ("ATS").
The combined purchase price was $32,121,638 plus construction adjustments of
$581,042 for the acquisition and construction of certain new sites from June
14, 1996 through the date of the sale. Assets which were not sold to ATS
include cash, accounts receivable, and assets related to the repeater business
which were sold to unrelated buyers (see Note 8).

F-64
<PAGE>

REPORT OF INDEPENDENT AUDITORS

The Board of Directors
American Tower Systems, Inc.

We have audited the accompanying balance sheets of Tucson Communications
Company (the "Partnership") as of December 31, 1997 and 1996, and the related
statements of income, partners' deficit, and cash flows for the years then
ended. The financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Tucson Communications
Company at December 31, 1997 and 1996, and the results of its operations and
its cash flows for the years then ended in conformity with generally accepted
accounting principles.

/s/ Ernst & Young LLP

Ernst & Young LLP
San Diego, California
January 13, 1998, except for Note 7,
as to which the date is January 27, 1998

F-65
<PAGE>

TUCSON COMMUNICATIONS COMPANY

BALANCE SHEETS

(IN THOUSANDS)

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1997 1996
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents........................... $ 623 $ 389
PROPERTY AND EQUIPMENT, net........................... 751 836
OTHER ASSETS.......................................... 16 18
------ -------
TOTAL................................................. $1,390 $ 1,243
====== =======
LIABILITIES AND PARTNERS' DEFICIT
CURRENT LIABILITIES:
Current portion of long-term debt................... $ 198 $ 180
Accrued expenses.................................... 31 18
------ -------
Total current liabilities......................... 229 198
LONG-TERM DEBT........................................ 1,851 2,065
OTHER LONG-TERM LIABILITIES........................... 22 47
------ -------
Total long-term liabilities....................... 1,873 2,112
PARTNERS' DEFICIT..................................... (712) (1,067)
------ -------
TOTAL................................................. $1,390 $ 1,243
====== =======
</TABLE>

See accompanying notes to financial statements.

F-66
<PAGE>

TUCSON COMMUNICATIONS COMPANY

STATEMENTS OF INCOME

(IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1997 1996
------------ ------------
<S> <C> <C>
REVENUES:
Tower revenues, including reimbursed expenses of
$121 and $116, respectively....................... $1,460 $1,438
OPERATING EXPENSES:
Tower operations................................... 317 287
Depreciation and amortization...................... 166 164
General and administrative......................... 136 84
------ ------
Total operating expenses......................... 619 535
------ ------
INCOME FROM OPERATIONS............................... 841 903
OTHER INCOME......................................... 12 19
INTEREST EXPENSE..................................... (198) (213)
------ ------
NET INCOME........................................... $ 655 $ 709
====== ======
</TABLE>

See accompanying notes to financial statements.

F-67
<PAGE>

TUCSON COMMUNICATIONS COMPANY

STATEMENTS OF PARTNERS' DEFICIT

(IN THOUSANDS)

<TABLE>
<S> <C>
BALANCE, DECEMBER 31, 1995............................................ $(1,151)
Net income............................................................ 709
Distributions......................................................... (625)
-------
BALANCE, DECEMBER 31, 1996............................................ (1,067)
Net income............................................................ 655
Distributions......................................................... (300)
-------
BALANCE, DECEMBER 31, 1997............................................ $ (712)
=======
</TABLE>

See accompanying notes to financial statements.

F-68
<PAGE>

TUCSON COMMUNICATIONS COMPANY

STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1997 1996
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.......................................... $ 655 $ 709
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization...................... 166 164
Changes in assets and liabilities:
Accrued expenses................................. 13 12
Other long-term liabilities...................... (25) (9)
----- -----
Net cash provided by operating activities...... 809 876
----- -----
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment................ (79) (12)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt........................ (196) (183)
Distributions...................................... (300) (625)
----- -----
Net cash used in financing activities.......... (496) (808)
----- -----
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS......................................... 234 56
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD....... 389 333
----- -----
CASH AND CASH EQUIVALENTS, END OF PERIOD............. $ 623 $ 389
===== =====
</TABLE>

See accompanying notes to financial statements.

F-69
<PAGE>

TUCSON COMMUNICATIONS COMPANY

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 1997 AND 1996

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business and Partnership Structure--Tucson Communications Company (the
"Partnership") was organized as a limited partnership in the state of
California on October 6, 1983 for the purpose of developing, managing and
leasing a communications site located in the Tucson Mountains near Tucson,
Arizona. Income allocations and cash distributions are in accordance with the
partnership agreement.

Concentration of Credit Risk--The Partnership extends credit to customers on
an unsecured basis in the normal course of business. The Partnership has
policies governing the extension of credit and collection of amounts due from
customers.

Impairment of Long-Lived Assets--In March 1995, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to Be Disposed Of ("FAS 121"). FAS 121 addresses the accounting for the
impairment of long-lived assets when events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. The
Partnership adopted this statement during 1996 and the impact on the
Partnership's results of operations, liquidity or financial position was not
material.

Cash and Cash Equivalents--Cash and cash equivalents includes cash on hand,
demand deposits, and short-term investments with original maturities of three
months or less.

Property and Equipment--Property and equipment are recorded at cost. Cost
includes expenditures for tower and related assets. Depreciation is provided
using the double-declining balance method on equipment and straight-line
method on buildings over estimated useful lives ranging from five to 31.5
years.

Fair Value of Financial Instruments--The Partnership believes that the
carrying value of all financial instruments is a reasonable estimate of fair
value as of December 31, 1997 and 1996, respectively.

Recognition of Revenues--Tower revenues are recognized when earned over the
lease terms.

Income Taxes--The financial statements contain no provision for income taxes
since the income or loss of the Partnership flows through to the Partners, who
are responsible for including their share of the taxable results of operations
on their respective tax returns.

F-70
<PAGE>

TUCSON COMMUNICATIONS COMPANY

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

2. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1997 1996
------------ ------------
<S> <C> <C>
Land and improvements............................ $ 593 $ 591
Towers and buildings............................. 1,635 1,635
Technical equipment.............................. 1,309 1,293
Construction in progress......................... 73 12
------- -------
Total.......................................... 3,610 3,531
Less accumulated depreciation.................... (2,859) (2,695)
------- -------
Property and equipment, net...................... $ 751 $ 836
======= =======
</TABLE>

The Partnership's property and equipment are generally leased to customers
under noncancelable operating leases with remaining terms ranging from one to
18 years. However, the leases allow cancellation under certain technical
circumstances as specified in the respective lease agreements. Many of the
leases also contain renewal options with specified increases in lease payments
upon exercise of the renewal option.

Future minimum tower revenues required to be paid by lessees under all
noncancelable leases in effect at December 31, 1997 are as follows (in
thousands):

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31:
------------------------
<S> <C>
1998.......................................................... $ 1,362
1999.......................................................... 1,401
2000.......................................................... 1,444
2001.......................................................... 1,489
2002.......................................................... 1,536
Thereafter.................................................... 11,496
-------
Total....................................................... $18,728
=======
</TABLE>

The amounts for the following customer accounted for greater than 10% of
total operating revenues (in thousands):

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1997 1996
------------ ------------
<S> <C> <C>
Motorola......................................... $443 $442
Peoples Choice................................... 143 143
Saturn Cable..................................... 156 149
</TABLE>

3. OTHER ASSETS

Other assets consisted of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1997 1996
------------ ------------
<S> <C> <C>
Prepaid loan fees................................ $ 31 $ 31
Less accumulated amortization.................... (16) (14)
Deposits......................................... 1 1
---- ----
Other assets..................................... $ 16 $ 18
==== ====
</TABLE>

F-71
<PAGE>

TUCSON COMMUNICATIONS COMPANY

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

4. LONG-TERM DEBT

On May 31, 1990, the Partnership entered into a loan agreement with a
financial institution to borrow $3,100,000. Every twelve months the loan bears
a new interest rate based on the one-year Constant Maturities, plus 3.5%. At
December 31, 1997, the interest rate in effect was 9.15%. The loan is secured
by land and equipment located on Tucson Mountain. Interest and principal
payments are payable monthly and the loan matures on July 1, 2005. Cash paid
for interest during the year ended December 31, 1997 and 1996 was $198,000 and
$214,000, respectively.

Future principal payments required under the Company's financing agreement
at December 31, 1997 are approximately (in thousands):

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31:
------------------------
<S> <C>
1998........................................................... $ 198
1999........................................................... 216
2000........................................................... 237
2001........................................................... 260
2002........................................................... 285
Thereafter..................................................... 853
------
Total........................................................ $2,049
======
</TABLE>

5. RELATED PARTY TRANSACTIONS

The Partnership pays an affiliated company for salaries, rent and utilities.
During the years ended December 31, 1997 and 1996, the Partnership paid
$72,000 and $65,000, respectively. In addition, the Partnership pays an
affiliate of the general partner on an hourly basis for management services.
During the years ended December 31, 1997 and 1996, the Partnership paid
$34,000 and $29,000, respectively.

6. CONTINGENCY

The Partnership received notification of a matter involving threatened
litigation relating to an on-site injury suffered by an individual during
1996. The party has requested a settlement payment of $800,000. Management of
the Partnership believes any liability arising from this matter will be
covered by insurance and will not have a material impact on the Partnership's
financial statements.

7. SUBSEQUENT EVENT

On January 27, 1998, the Partnership sold substantially all of the assets of
the Partnership to American Tower Systems, Inc. for approximately $12,000,000.

F-72
<PAGE>

INDEPENDENT AUDITORS' REPORT

The Stockholders
Gearon & Co., Inc.:

We have audited the accompanying balance sheets of Gearon & Co., Inc. (the
"Company") as of December 31, 1997 and 1996, and the related statements of
operations, changes in stockholders' equity, and cash flows for the years then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Company at December 31, 1997 and 1996,
and the results of its operations and its cash flows for the years then ended,
in conformity with generally accepted accounting principles.

/s/ Deloitte & Touche LLP

Deloitte & Touche LLP
Atlanta, Georgia
February 27, 1998

F-73
<PAGE>

GEARON & CO., INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1997 1996
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents.......................... $ 4,285,940 $ 813,182
Accounts receivable--trade, net of allowance for
doubtful accounts of $309,164 and $129,650 in 1997
and 1996, respectively............................ 6,516,370 7,132,363
Unbilled receivables............................... 4,741,198 515,688
Accounts receivable--other......................... 286,751 6,390
Receivable from related party...................... -- 200,000
----------- ----------
Total current assets............................. 15,830,259 8,667,623
PROPERTY AND EQUIPMENT, net.......................... 3,793,881 561,028
OTHER ASSETS......................................... 138,800 27,530
----------- ----------
TOTAL................................................ $19,762,940 $9,256,181
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable................................... $ 2,653,403 $ 27,587
Accrued expenses................................... 239,350 39,693
Accrued merger related expenses.................... 6,225,205
Note payable....................................... 5,000,000
----------- ----------
Total current liabilities........................ 14,117,958 67,280
COMMITMENTS AND CONTINGENCIES (Note 3)
STOCKHOLDERS' EQUITY
Common stock, no par value, 10,000 shares
authorized;
7,500 issued and outstanding in 1996.............. 750
Class A voting common stock, no par value, 10,000
shares authorized, 7,500 issued and outstanding in
1997.............................................. 8
Class B nonvoting common stock, no par value,
1,000,000 shares authorized, 798,335 issued and
outstanding in 1997............................... 798
Additional paid-in capital......................... 5,549,944
Retained earnings.................................. 94,232 9,188,151
----------- ----------
Total stockholder's equity....................... 5,644,982 9,188,901
----------- ----------
TOTAL................................................ $19,762,940 $9,256,181
=========== ==========
</TABLE>

See notes to financial statements.

F-74
<PAGE>

GEARON & CO., INC.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1997 1996
------------ ------------
<S> <C> <C>
REVENUES:
Fees and bonuses................................... $25,052,348 $15,613,655
Pass-through revenues.............................. 4,376,070 5,349,795
Tower rentals...................................... 172,868 53,200
Other.............................................. 328,467 467,785
----------- -----------
Total revenues................................... 29,929,753 21,484,435
OPERATING EXPENSES:
Operating expenses................................. 12,835,263 6,619,029
Tower expenses..................................... 165,887 41,926
Pass-through expenses.............................. 4,376,070 5,349,795
----------- -----------
Total operating expenses......................... 17,377,220 12,010,750
----------- -----------
GROSS PROFIT......................................... 12,552,533 9,473,685
General and administrative expenses.................. 2,496,749 1,394,757
Merger related expenses.............................. 13,796,434
----------- -----------
INCOME (LOSS) FROM OPERATIONS........................ (3,740,650) 8,078,928
OTHER INCOME AND EXPENSES, NET....................... 73,310 94,822
----------- -----------
NET INCOME (LOSS).................................... $(3,667,340) $ 8,173,750
=========== ===========
</TABLE>

See notes to financial statements.

F-75
<PAGE>

GEARON & CO., INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK
------------------------- ADDITIONAL
COMMON CLASS A CLASS B PAID-IN RETAINED
STOCK VOTING NONVOTING CAPITAL EARNINGS TOTAL
------ ------- --------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE--January 1,
1996................... $ 750 $-- $-- $ -- $ 8,783,131 $ 8,783,881
Distributions to
shareholder.......... (7,768,730) (7,768,730)
Net income............ 8,173,750 8,173,750
----- ---- ---- ---------- ----------- -----------
BALANCE--December 31,
1996................... 750 9,188,151 9,188,901
Exchange of 7,500
shares of original
common stock for
7,500 shares of Class
A voting stock and
742,500 shares of
Class B nonvoting
common stock......... (750) 8 742
Issuance of 55,835
shares of Class B
nonvoting stock to
certain employees.... 56 5,549,944 5,550,000
Distributions to
shareholder.......... (5,426,579) (5,426,579)
Net loss.............. (3,667,340) (3,667,340)
----- ---- ---- ---------- ----------- -----------
BALANCE--December 31,
1997................... $ -- $ 8 $798 $5,549,944 $ 94,232 $ 5,644,982
===== ==== ==== ========== =========== ===========
</TABLE>

See notes to financial statements.

F-76
<PAGE>

GEARON & CO., INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1997 1996
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)................................. $(3,667,340) $ 8,173,750
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Provision for doubtful accounts................. 383,167 129,650
Depreciation.................................... 185,670 103,283
Noncash merger related expense.................. 5,550,000
Changes in assets and liabilities;
Decrease (increase) in accounts receivable
trade........................................ 232,826 (3,434,228)
Decrease (increase) in unbilled receivables... (4,225,510) 782,867
Decrease (increase) in accounts receivable
other........................................ (280,361) 20,307
Increase in other assets...................... (111,270) (21,748)
Increase (decrease) in accounts payable....... 1,779,560 (35,463)
Increase (decrease) in accrued expenses....... 199,657 (22,523)
Increase in accrued merger related expense.... 6,225,205
------------ -----------
Net cash provided by operating activities......... 6,271,604 5,695,895
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES;
Acquisition of property and equipment............. (329,998) (134,910)
Construction of towers, net of accounts payable... (2,242,269) (336,242)
------------ -----------
Net cash used in investing activities....... (2,572,267) (471,152)
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to stockholder...................... (5,426,579) (7,768,730)
Repayments from (loans to) related party.......... 200,000 (170,000)
Proceeds from note payable........................ 5,000,000
Loan from stockholder............................. 500,000
Repayment to stockholder.......................... (500,000)
------------ -----------
Net cash used in financing activities....... (226,579) (7,938,730)
------------ -----------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS........................................ 3,472,758 (2,713,987)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR ....... 813,182 3,527,169
------------ -----------
CASH AND CASH EQUIVALENTS, END OF YEAR.............. $ 4,285,940 $ 813,182
============ ===========
</TABLE>

See notes to financial statements.

F-77
<PAGE>

GEARON & CO., INC.

NOTES TO FINANCIAL STATEMENTS
(AS OF AND FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business and Corporate Structure--Gearon & Co., Inc. (the "Company"), a
Georgia corporation, was incorporated on September 6, 1991 and is engaged in
the site acquisition, development, construction and facility management of
wireless network communication facilities on behalf of its customers. The
Company operates in markets throughout the United States. In addition, as of
December 31, 1997, the Company owned and operated 16 communications towers
with an additional 20 towers in varying stages of development. The towers are
located in Georgia, Florida, and Tennessee.

On January 22, 1998, the Company merged into and became a part of American
Tower Systems, Inc. (ATSI) a subsidiary of American Radio Systems Corporation
(ARS), pursuant to an Agreement and Plan of Merger ("the Merger Agreement")
executed on November 21, 1997. Under the Merger Agreement, the holders of the
Company's common stock at the effective date of the merger received a total of
$32,000,000 in cash and liabilities assumed by ATSI and 5,333,333 shares of
ATSI stock with an agreed-upon fair value of $48,000,000.

On December 30, 1997, the Company awarded a total of 55,835 shares of Class
B common stock valued at $5,550,000 (based on the share price paid by ATSI in
the merger) to certain key employees, awarded cash bonuses totaling
approximately $7,667,000 to certain employees, and incurred approximately
$580,000 in other merger related expenses. On January 20, 1998, the Company
awarded an additional 503 shares of Class B common stock valued at $50,000
(based on the share price paid by ATSI in the merger) to a key employee. In
addition, on January 20, 1998, accounts receivable of approximately
$11,000,000 and two automobiles with a net book value of $16,247 were
distributed to the majority stockholder.

Pursuant to the Merger Agreement, the Company borrowed a total of
$10,000,000 from ATSI in two $5,000,000 installments on December 24, 1997 and
January 20, 1998, respectively, to fund working capital and merger related
expenses. Such borrowings bore interest at 7.5% and were repaid at closing.

Use of Estimates--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Concentration of Credit Risk--The Company extends credit to customers on an
unsecured basis in the normal course of business. Credit risk is limited due
to the financial reputation of the customers comprising the Company's customer
base. The Company has policies governing the extension of credit and
collection of amounts due from customers.

The following represents a summary of fees and bonuses earned from
individual customers in excess of 10% of total fees and bonuses for the year
ended:

<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
Customer A........................................... $7,705,000 $4,773,000
Customer B........................................... 5,462,000
Customer C........................................... 5,660,000
</TABLE>

Impairment of Long-Lived Assets--In March 1995, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards ("SFAS")
No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of. SFAS 121 addresses the accounting for the impairment
of

F-78
<PAGE>

GEARON & CO., INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

long-lived assets, certain intangibles and goodwill when events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. The Company adopted this statement during 1996 and the impact on
the Company's results of operations, liquidity or financial position was not
material.

Cash and Cash Equivalents--Cash and cash equivalents includes cash on hand,
demand deposits and short-term investments with original maturities of three
months or less.

Property and Equipment--Property and equipment are recorded at cost.
Ordinary repairs and maintenance are expensed as incurred; major replacements
and improvements are capitalized and depreciated over their estimated useful
lives. Depreciation is provided using the straight-line method over the
estimated useful lives of the assets as follows:

<TABLE>
<S> <C>
Leasehold improvements...................................... Life of lease
Furniture and fixtures...................................... 3-7 years
Machinery and equipment..................................... 3-7 years
Communications towers....................................... 15 years
</TABLE>

Construction in Progress--The Company's tower construction expenditures are
recorded as construction in progress until the assets are placed in service.
When the assets are placed in service, they are transferred to the appropriate
property and equipment category and depreciated. The Company also capitalizes
subcontractor and employee labor and overhead costs incurred in connection
with the construction of towers.

Revenue Recognition--Revenues from fees and bonuses are recognized based
upon the completion of certain activities as defined by the respective
contracts with individual customers. Several of the contracts provide for
reimbursement by customers of certain costs in addition to fees earned. Such
costs are recognized on the accrual basis and are reflected as pass-through
revenues and expenses in the statements of operations. Tower and sublease
revenues are recognized when earned over the terms of the related leases.

Income Taxes--At inception, the Company elected to be treated as a
Subchapter S Corporation ("S Corporation") for income tax purposes.
Accordingly, no recognition has been given to income taxes in the financial
statements since the income is reportable on the individual tax return of the
stockholders. Two states in which the Company does business do not recognize S
Corporations for tax purposes and therefore the Company is liable for income
taxes in those states. The amounts paid or accrued for income taxes were not
material in relation to the financial statements.

New Accounting Pronouncement--In June 1997, the Financial Accounting
Standards Board issued SFAS 131, "Disclosure About Segments of an Enterprise
and Related Information" which the Company will adopt in 1998. SFAS 131
redefines how operating segments are determined and requires disclosure of
certain financial and descriptive information about a company's operating
segments. The Company has not yet completed its analysis of the impact of this
statement.

Reclassifications--Certain 1996 amounts have been reclassified to conform to
the 1997 presentation.

F-79

<PAGE>

GEARON & CO., INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

2. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1997 1996
------------ ------------
<S> <C> <C>
Land............................................ $ 82,198 $ --
Leasehold improvements.......................... 73,180 60,902
Furniture and fixtures.......................... 138,111 81,694
Machinery and equipment......................... 564,404 306,705
Communications towers........................... 2,542,922 336,242
Construction in progress........................ 801,060 --
---------- ---------
Property and equipment, at cost................. 4,201,875 785,543
Accumulated depreciation........................ (407,994) (224,515)
---------- ---------
Property and equipment--net..................... 3,793,881 $ 561,028
========== =========
</TABLE>

3. COMMITMENTS AND CONTINGENCIES

Lease Obligations--The Company currently leases office space, office
equipment and land for communications towers under operating leases that
expire at varying dates through 2002. The tower ground leases contain options
for the Company to renew, at its discretion, for five-year periods up to a
maximum term of twenty-five years. The leases require the Company to maintain
certain insurance coverage and provide for maintenance and repairs. Future
minimum lease payments for noncancelable office, equipment and ground leases
are as follows for the periods ending December 31:

<TABLE>
<S> <C>
1998........................................................... 400,794
1999........................................................... 374,501
2000........................................................... 351,755
2001........................................................... 234,971
2002........................................................... 179,705
----------
Total.......................................................... $1,541,726
==========
</TABLE>

Customer Leases--The Company owns communications towers which it leases to
third parties. The leases which are noncancelable and expire at various dates
through 2006, contain options for the lessees to renew, at their discretion,
for 5-year periods up to a maximum term of 25 years.

Future minimum rental receipts expected to be received from customers under
noncancelable leases are as follows for the periods ending December 31:

<TABLE>
<S> <C>
1998........................................................... $ 731,511
1999........................................................... 794,812
2000........................................................... 803,334
2001........................................................... 766,185
2002........................................................... 654,154
Thereafter..................................................... 159,016
----------
Total.......................................................... $3,909,012
==========
</TABLE>

F-80
<PAGE>

GEARON & CO., INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

Purchase Commitments--At December 31, 1997, the Company had entered into an
agreement to acquire land for a communications tower for a purchase price of
$100,000. The purchase closed on February 11, 1998. In addition, at December
31, 1997, the Company had a verbal agreement with a customer to purchase seven
communications towers for an aggregate purchase price of approximately
$1,000,000. This purchase is expected to be consummated in March 1998.

Employment Agreement--In August 1997, the Company entered into an employment
agreement with an officer of the Company. The Agreement is for a term of one
year and is renewable for successive one-year terms. The agreement contains
provisions for compensation in the event of termination or a change in control
of the Company. The compensation due to this officer as a result of the merger
discussed in Note 1 has been included in accrued merger related expenses as of
December 31, 1997. In November and December 1997, the Company entered into
employment agreements with two officers of the Company. These agreements are
for a term of two years, renewable for successive two-year terms and contain
provisions for compensation in the event of termination other than for cause.

Legal Matters--The Company is a party to certain legal matters arising in
the ordinary course of business. In the opinion of management, none of these
matters are expected to have a material effect on the financial position,
results of operations, or cash flows of the Company.

4. RETIREMENT PLAN

On September 1, 1996, the Company established the Gearon & Co., Inc.
Employee Savings and Retirement Plan (the "Plan"), a 401(k) plan. Employees of
the Company are eligible for participation in the Plan subject to certain
minimum age and length of employment requirements. Plan participants can
contribute from 2% to 15% of their compensation, as defined. The Company
matches 25% of the participants' contributions up to 10% of compensation. The
Plan's assets are invested in equity, bond, balanced, and money market mutual
funds. The Company contributed approximately $79,000 and $24,000 for the years
ended December 31, 1997 and 1996, respectively.

5. COMMON STOCK

Effective October 23, 1997, the Company authorized the issuance of 10,000
shares of Class A common stock and 1,000,000 shares of Class B common stock.
Class A has voting privileges while Class B common stock is nonvoting. On
October 23, 1997, all 7,500 shares of common stock previously outstanding were
exchanged for 7,500 shares of Class A common stock and 742,500 shares of Class
B common stock which were transferred to the original stockholder and a trust
related to the original stockholder.

6. RELATED PARTY TRANSACTIONS

The receivable from a related party totaling $200,000 at December 31, 1996
was repaid in full in January 1997.

F-81
<PAGE>

INDEPENDENT AUDITORS' REPORT

The Board of Directors
American Tower Corporation:

We have audited the accompanying consolidated balance sheets of American
Tower Corporation and subsidiaries as of December 31, 1996 and 1997, and the
related consolidated statements of operations, stockholders' equity and cash
flows for each of the years in the three-year period ended December 31, 1997.
These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of American
Tower Corporation and subsidiaries as of December 31, 1996 and 1997 and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 1997 in conformity with generally
accepted accounting principles.

KPMG Peat Marwick llp

Houston, Texas
January 23, 1998

F-82
<PAGE>

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)

ASSETS

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, MARCH 31,
1996 1997 1998
------------ ------------ -----------
(UNAUDITED)
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents.............. $ 92 $ 996 $ 1,111
Accounts receivable, net of allowance
for doubtful accounts of $104, $175
and $174 respectively................. 816 1,021 1,084
Prepaid expenses and other current as-
sets.................................. 793 719 984
Assets held for sale................... 700 -- --
------- -------- --------
Total current assets.................. 2,401 2,736 3,179
Land.................................... 5,301 6,234 6,239
Rental towers and related fee based as-
sets, net of accumulated depreciation
of $3,984, $8,362 and $9,730, respec-
tively................................. 61,556 112,412 125,788
Other assets, net of accumulated amorti-
zation of $836, $951 and $1,268, re-
spectively............................. 6,269 7,432 7,785
------- -------- --------
Total assets.......................... $75,527 $128,814 $142,991
======= ======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable....................... $ 720 $ 2,810 $ 688
Accrued interest payable............... 598 1,061 4
Deferred revenues and other current li-
abilities............................. 978 2,125 3,277
Current portion of long-term debt...... 1,075 1,000 1,000
------- -------- --------
Total current liabilities............. 3,371 6,996 4,969
Long-term debt, less current portion.... 49,771 74,478 90,139
Other liabilities....................... 450 190 184
Deferred income taxes................... 6,337 6,767 6,957
------- -------- --------
Total liabilities..................... 59,929 88,431 102,249
Commitments and contingencies
Redeemable preferred stock $.01 par val-
ue.
Authorized 5,000,000 shares; 22,500
shares issued and outstanding......... 4,000 4,052 4,067
Stockholders' equity:
Common stock, $.01 par value. Autho-
rized 250,000 shares; 75,331, 149,549
and 149,549 shares issued and out-
standing, respectively................ 1 2 2
Additional paid-in capital............. 12,051 36,426 36,426
Retained earnings (accumulated defi-
cit).................................. (454) (97) 247
------- -------- --------
Total stockholders' equity............ 11,598 36,331 36,675
------- -------- --------
Total liabilities and stockholders'
equity............................... $75,527 $128,814 $142,991
======= ======== ========
</TABLE>

See accompanying notes to consolidated financial statements.

F-83
<PAGE>

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS ENDED
DECEMBER 31, MARCH 31,
------------------------ --------------------
1995 1996 1997 1997 1998
------ ------- ------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Total revenues................ $8,277 $12,366 $20,006 $ 4,581 $ 6,260
Operating expenses:
Direct tower costs........... 1,868 2,849 4,138 856 1,305
Selling, general and adminis-
trative..................... 1,601 2,049 3,183 723 862
Depreciation and amortiza-
tion........................ 1,908 2,709 4,903 1,027 1,755
------ ------- ------- --------- ---------
Total operating expenses.... 5,377 7,607 12,224 2,606 3,922
------ ------- ------- --------- ---------
Operating income.............. 2,900 4,759 7,782 1,975 2,338
Interest expense.............. 3,068 3,808 5,439 1,285 1,791
Other expenses................ 414 150 514 33 --
------ ------- ------- --------- ---------
Income (loss) before income
taxes and extraordinary
item......................... (582) 801 1,829 657 547
Income tax (expense) benefit.. 217 (303) (801) (288) (188)
------ ------- ------- --------- ---------
Income (loss) before extraor-
dinary item.................. (365) 498 1,028 369 359
Extraordinary loss, net of tax
benefit of $117, $272, and
$371, respectively........... 207 451 619 -- --
------ ------- ------- --------- ---------
Net income (loss)............. (572) 47 409 369 359
Accretion of preferred stock.. -- -- 52 -- 15
------ ------- ------- --------- ---------
Net income (loss) available to
common stockholders.......... $ (572) $ 47 $ 35 $ 369 $ 344
====== ======= ======= ========= =========
</TABLE>

See accompanying notes to consolidated financial statements.

F-84
<PAGE>

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
COMMON STOCK
-------------
TOTAL
ADDITIONAL ACCUMULATED STOCKHOLDERS'
SHARES VALUE PAID-IN CAPITAL DEFICIT EQUITY
------- ----- --------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Balances at December 31,
1994................... 67,500 $ 1 $ 7,424 $ 71 $ 7,496
Allocation of redeemable
preferred stock pro-
ceeds to warrants...... -- -- 500 -- 500
Net loss................ -- -- -- (572) (572)
------- --- ------- ---- -------
Balances at December 31,
1995................... 67,500 1 7,924 (501) 7,424
Shares of common stock
issued in acquisition.. 6,481 -- 4,127 -- 4,127
Conversion of warrants
to common stock........ 1,350 -- -- -- --
Net income.............. -- -- -- 47 47
------- --- ------- ---- -------
Balances at December 31,
1996................... 75,331 1 12,051 (454) 11,598
Conversion of warrants
to common stock........ 24,265 -- -- -- --
Conversion of warrants
with put feature to
common stock........... 12,462 -- 174 -- 174
Sale of common stock,
net of issuance costs.. 36,049 1 23,201 -- 23,202
Common stock issued in
connection with tower
acquisition............ 1,442 -- 1,000 -- 1,000
Net income.............. -- -- -- 409 409
Accretion of redeemable
preferred stock........ -- -- -- (52) (52)
------- --- ------- ---- -------
Balances at December 31,
1997................... 149,549 $ 2 36,426 (97) 36,331
Net income (unaudited)
....................... -- -- -- 359 359
Accretion of redeemable
preferred stock
(unaudited) ........... -- -- -- (15) (15)
------- --- ------- ---- -------
Balances at March 31,
1998 (unaudited) ...... 149,549 $ 2 $36,426 $247 $36,675
======= === ======= ==== =======
</TABLE>

See accompanying notes to consolidated financial statements

F-85
<PAGE>

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS ENDED
DECEMBER 31, MARCH 31,
------------------------ --------------------
1995 1996 1997 1997 1998
------ ------- ------- --------- ---------
(UNAUDITED) ---
<S> <C> <C> <C> <C> <C> <C>
Cash flows from operating
activities:
Net income (loss)......... $ (572) $ 47 $ 409 $ 369 $ 359
Adjustments to reconcile
net income (loss) to net
cash
provided by operating
activities:
Depreciation and amorti-
zation.................. 1,908 2,709 4,903 1,027 1,755
Accretion of debt dis-
counts.................. 202 808 121 109 111
Deferred income taxes.... (334) 31 430 288 190
Deferred loan costs writ-
ten-off................. 324 -- 990 -- --
Changes in assets and lia-
bilities:
Increase in accounts re-
ceivable, net........... (203) (218) (205) (709) (63)
(Increase) decrease in
prepaid expenses and
other current assets.... (109) (111) 74 (239) (265)
Increase (decrease) in
accounts payable........ 59 231 2,090 194 (2,122)
Increase (decrease) in
accrued interest pay-
able.................... 14 59 463 67 (1,057)
Increase (decrease) in
deferred revenues and
other................... 332 (417) 1,061 143 1,152
------ ------- ------- --------- ---------
Total adjustments....... 2,193 3,092 9,927 880 (299)
------ ------- ------- --------- ---------
Net cash provided by op-
erating activities..... 1,621 3,139 10,336 1,249 60
------ ------- ------- --------- ---------
Cash flows from investing
activities:
Payments for purchases of
towers and related as-
sets..................... (7,351) (14,249) (56,075) (11,795) (15,484)
Proceeds from the sale of
land..................... 24 -- -- -- --
Payments for purchases of
land..................... (500) (1,124) (933) (100) (5)
------ ------- ------- --------- ---------
Net cash used in invest-
ing activities......... (7,827) (15,373) (57,008) (11,895) (15,489)
------ ------- ------- --------- ---------
Cash flows from financing
activities:
Proceeds from borrowings
on long-term debt........ 4,646 39,850 70,800 11,262 15,544
Proceeds from issuance of
common stock............. -- -- 23,202 -- --
Proceeds from issuance of
preferred stock.......... 4,133 367 -- -- --
Payments of long-term
debt..................... (1,680) (28,736) (45,633) -- --
Payments of deferred loan
costs and interest rate
cap...................... (98) (1,060) (793) -- --
------ ------- ------- --------- ---------
Net cash provided by
(used in) financing ac-
tivities............... 7,001 10,421 47,576 11,262 15,544
------ ------- ------- --------- ---------
Net increase (decrease)
in cash and cash equiv-
alents................. 795 (1,813) 904 616 115
Cash and cash equivalents
at beginning of period.... 1,110 1,905 92 92 996
------ ------- ------- --------- ---------
Cash and cash equivalents
at end of period.......... $1,905 $ 92 $ 996 $ 708 $ 1,111
====== ======= ======= ========= =========
Supplemental disclosure of
cash flow information--
cash paid during the pe-
riod for interest......... $2,915 $ 2,925 $ 3,902 $ 656 $ 1,919
====== ======= ======= ========= =========
</TABLE>

See accompanying notes to consolidated financial statements.

F-86
<PAGE>

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1995, 1996 AND 1997 AND MARCH 31, 1997 AND 1998 (UNAUDITED)

(1)SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Presentation

The accompanying consolidated financial statements reflect the financial
position, results of operations, and cash flows of American Tower Corporation
and its wholly-owned subsidiaries, collectively referred to as ATC or the
Company. All significant intercompany transactions and balances have been
eliminated.

(b) Description of Business

The primary business of the Company is the leasing of antenna and
transmitter space on communication towers to companies using or providing
cellular telephone, paging, microwave and specialized mobile radio services.
The Company currently owns and operates communication tower sites located
primarily in the western, eastern and southern United States.

The unaudited financial statements for the three months ended March 31, 1997
and 1998 are presented for comparative purposes only and have been prepared on
a basis substantially consistent with that of the audited financial statements
included herein. In the opinion of management, such unaudited financial
statements include all adjustments, which are of a normal and recurring
nature, considered necessary for a fair presentation. Operating results for
the three-month periods ended March 31, 1997 and 1998 are not necessarily
indicative of the results that may be expected for a full year.

(d) Cash Equivalents

Cash equivalents consist of short-term investments with an original maturity
of three months or less.

(e) Rental Towers and Related Fee Based Assets

Rental towers and related fee based assets are stated at cost. Depreciation
on rental towers and related fee based assets is calculated on the straight-
line method over the estimated useful lives of the assets which range from 3
to 25 years.

(f) Other Assets

Other assets include licenses and permits which are amortized on a straight-
line basis over their expected period of benefit, 25 years, and a noncompete
agreement with a stockholder which is being amortized on a straight-line basis
over its seven year term. Also included are deferred loan costs associated
with various debt issuances which are amortized over the terms of the related
debt based on the amount of outstanding debt using the interest method.

(g) Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of

The Company adopted the provisions of Statement of Financial Accounting
Standards (SFAS) No. 121, Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of, on January 1, 1996. This
statement requires that long-lived assets and certain identifiable intangibles
be reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable.
Recoverability of assets to be held and used is measured by a comparison of
the carrying amount of an asset to future net cash flows expected to be
generated by the asset. If such assets are considered to be impaired, the
impairment to be recognized is measured by the amount by which the carrying
amount of the assets exceeds the fair value of the assets. Assets to be
disposed of are reported at the lower of the carrying amount or the fair value
less costs of disposal. Adoption of this statement did not have a material
impact on the Company's financial position, results of operations, or
liquidity.

F-87
<PAGE>

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(h) Income Taxes

Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years which those temporary
differences are expected to be recovered or settled. The effect on deferred
tax
assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.

(i) Fair Value of Financial Instruments

SFAS No. 107, Disclosure about Fair Value of Financial Instruments requires
the Company to disclose estimated fair values for its financial instruments.
Fair value estimates are made at discrete points in time based on relevant
market information. These estimates may be subjective in nature and involve
uncertainties and matters of significant judgment and therefore, cannot be
determined with precision.

The Company believes that the carrying amounts of its financial instrument
current assets and current liabilities approximate the fair value of such
items due to their short-term nature. The carrying amount of long-term debt
approximates its fair value because the interest rates approximate market.

(j) Revenue Recognition

Revenues are recognized as tower services are provided. Amounts billed or
received prior to services being performed are deferred until such time as the
revenue is earned.

(k) Stock Option Plan

On January 1, 1996, the Company adopted SFAS No. 123, Accounting for Stock-
Based Compensation, which permits entities to recognize as expense over the
vesting period the fair value of all stock-based awards on the date of grant.
Alternatively, SFAS No. 123 allows entities to continue to apply the
provisions of Accounting Principles Board (APB) Opinion No. 25 and provide pro
forma net income disclosures as if the fair-value-based method defined in SFAS
No. 123 had been applied. The Company has elected to continue to apply the
provisions of APB Opinion No. 25 and provide the pro forma disclosure
requirements of SFAS No. 123.

(l) Interest Rate Cap Agreements

The Company was party to a financial instrument to reduce its exposure to
fluctuations in interest rates. The purchase price of the interest rate cap
agreements was capitalized and included in prepaid expenses in the
accompanying consolidated balance sheets and amortized over the life of the
agreements using the straight-line method. The interest rate cap agreements
expired in December 1997.

(m) Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect reported amounts of assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

(n) Reclassifications

Certain reclassifications have been made to prior period amounts in order to
conform to the current presentation.

(2)RENTAL TOWERS AND RELATED FEE BASED ASSETS

Asset Acquisitions

In December 1995, the Company acquired in a single transaction substantially
all of the tower sites and locations of CSX Realty Development Corporation
(CSX) for $9,750,000 which was funded through cash and

F-88
<PAGE>

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

seller financed debt. In addition during 1995, the Company acquired 81 other
tower sites in several unrelated transactions.

In October 1996, the Company acquired in a single transaction substantially
all of the tower sites and locations of Prime Communications Sites Holdings
LLC and its subsidiary (Prime) for approximately $15.3 million which was
funded through borrowings under the Company's credit facility, seller financed
debt and the issuance of common stock of the Company to the seller. In
addition, during 1996 the Company acquired four other tower sites in two
unrelated transactions.

In July 1997, the Company acquired in a single transaction 32 tower sites
for approximately $11.8 million which was funded through borrowings under the
Company's credit facility. In addition, during 1997 the Company acquired 89
tower sites in several unrelated transactions totaling $25.2 million. The
purchase price for all acquisitions has been allocated to the land, towers and
related fee based assets and licenses and permits based on their respective
estimated fair values.

The following unaudited pro forma information represents the consolidated
results of operations of the Company as if the 1997 acquisitions had occurred
on January 1, 1996, and the 1996 acquisitions had occurred on January 1, 1995
(in thousands):

<TABLE>
<CAPTION>
1995 1996 1997
------- ------- -------
<S> <C> <C> <C>
Rental revenue.................................... $10,575 $17,290 $21,578
Operating income.................................. $ 3,737 $ 7,835 $ 9,039
Net loss.......................................... $(1,442) $(2,002) $ (326)
</TABLE>

The pro forma information is not necessarily indicative of operating results
that would have occurred if each acquisition had been consummated as of the
respective dates, nor is it necessarily indicative of future operating
results. The actual results of operations of the acquired assets are included
in the Company's consolidated financial statements only from the date of
acquisition.

TOWER DISPOSAL

On January 13, 1997, the Company entered into a binding letter agreement
with a related shareholder and director to sell 45 communication towers for a
purchase price of $700,000. The closing of this transaction occurred during
March 1997. At the closing, the Company sold the communication towers to the
shareholder in exchange for a $700,000 reduction in payments owed under the
subordinated note payable to the shareholder issued in October 1994. See note
6 for further discussion. Due to the agreement, the related assets have been
reflected as assets held for resale on the December 31, 1996 balance sheet.

(3)PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consisted of the following (in
thousands):

<TABLE>
<CAPTION>
DECEMBER
31,
--------- MARCH 31, ---
1996 1997 1998
---- ---- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Prepaid land leases................................... $619 $637 $727
Other current assets.................................. 174 82 257
---- ---- ----
$793 $719 $984
==== ==== ====
</TABLE>

F-89
<PAGE>

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(4)OTHER ASSETS

Other assets consisted of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
------------- MARCH 31,
1996 1997 1998
------ ------ -----------
(UNAUDITED)
<S> <C> <C> <C>
Deferred loan costs, net.............................. $1,009 $ 751 $719
Licenses and permits, net............................. 4,428 5,898 6,289
Noncompete costs, net................................. 623 538 502
Other assets.......................................... 209 245 275
------ ------ ------
$6,269 $7,432 $7,785
====== ====== ======
</TABLE>

(5)DEFERRED REVENUES AND OTHER CURRENT LIABILITIES

Deferred revenues and other current liabilities consisted of the following
(in thousands):

<TABLE>
<CAPTION>
DECEMBER
31,
----------- MARCH 31,
1996 1997 1998
---- ------ -----------
(UNAUDITED)
<S> <C> <C> <C>
Deferred revenues....................................... $201 $1,125 $1,799
Deferred compensation contracts......................... 300 150 150
Accrued expenses and other.............................. 477 850 1,328
---- ------ ------
$978 $2,125 $3,277
==== ====== ======
</TABLE>

(6)LONG-TERM DEBT

On October 11, 1996, the Company entered into a senior credit facility (the
Credit Facility) in connection with the acquisition of the communication
towers from Prime as discussed in note 2. The Credit Facility was extinguished
during 1997 in connection with the Company entering into a new Senior Credit
Agreement, discussed in further detail below.

The Credit Facility included a $23 million revolving line of credit, which
included a sub-allotment for letters of credit, and a $37 million term loan
facility. The Company utilized the proceeds of the term loan to (i) repay
$21.6 million of principal and interest to its existing senior lenders, (ii)
prepay in full $6.1 million of principal and interest to its senior
subordinated lender, and (iii) to fund $8.6 million of the purchase price for
the Prime acquisition.

The Credit Facility incurred interest at LIBOR plus 275 basis points for
interest periods ranging up to five months; thereafter, the credit facility
incurred interest at LIBOR plus an applicable margin, not to exceed 275 basis
points, based upon a defined leverage ratio, for interest periods of one,
three or six months. The term loan and the revolving Credit Facility required
principal amortization with quarterly payments totaling $5.6 million in 1999.
The Credit Facility contained restrictions on payment of dividends, and set
forth minimum operating cash flows, as defined, to be attained by the Company.

Immediately prior to entering into the Credit Facility in October 1996, the
Company owed its senior lenders $21.5 million under a term loan, revolving
line of credit and acquisition line of credit facilities which had been
amended and extended in December 1995. The outstanding balance of the prior
senior agreement bore interest at LIBOR plus 275 basis points. In conjunction
with entering into the Credit Facility, the Company expensed $451,000, net of
taxes, of deferred loan and other financing costs associated with prior credit
facilities. In conjunction with the amendment of the Company's senior credit
agreement in December 1995, the Company expensed $207,000, net of taxes, of
deferred loan and other financing costs associated with prior credit
facilities. Such deferred loan and other financing costs written off in 1995
have been reflected as extraordinary losses in the consolidated statements of
operations.

F-90
<PAGE>

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

On June 30, 1997, the Company entered into a new senior credit agreement
(the Credit Agreement). The Credit Agreement includes a $100 million revolving
line of credit, which includes a sub-allotment for letters of credit and a $25
million term loan facility. In connection with entering into the Credit
Agreement, the Company expensed $619,000, net of taxes, of deferred loan and
other financing costs associated with the prior credit facility. These
deferred loan and other financing costs written off in 1997 have been
reflected as extraordinary loss in the consolidated statements of operations.

SELLER ACQUISITION FINANCING

In connection with the acquisition of the towers and related sites in
October 1996 as more fully discussed in note 2 and above, the Company issued
an aggregate of $2.5 million of subordinated term notes to certain
sellers. Payment terms required (i) a single installment on October 11, 2004
or (ii) immediate payment upon an initial public offering. The subordinated
term notes incurred interest at 11% payable quarterly commencing January 1997.
During 1997 these notes were fully repaid.

Long-term debt consists of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
---------------- MARCH 31,
1996 1997 1998
------- ------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Term note payable, due in quarterly payments
beginning in September 1999, interest at a
base rate, as defined...................... $ -- $70,800 $86,350
Term note payable, due in quarterly payments
beginning in January 1999, interest at
8.38% until May 1997 at which time interest
is LIBOR plus a maximum of 2.75%. Balance
repaid during 1997......................... 39,850 -- --
Seller financing, noninterest-bearing
secured note payable, due in annual
installments commencing December 20, 1996
through December 20, 2000.................. 6,313 5,313 5,313
Subordinated note payable to shareholder,
interest payable in quarterly installments
at 10.5% per annum; payment of principal
due in annual installments beginning
November 15, 2001; original principal
reduced by value of stock warrant (see note
9). Balance repaid during 1997............. 3,000 -- --
Subordinated notes payable, interest payable
in quarterly installments at 11.0% per
annum; single installment due October 2004.
Balance repaid during 1997................. 2,561 -- --
Noninterest-bearing unsecured note payable,
maturing in 1999........................... 500 500 500
Note payable, due in quarterly installments
commencing January 1, 1995 bearing interest
at 10%. Balance repaid during 1997......... 300 -- --
Other....................................... 43 34 34
Discounts associated with noninterest-
bearing obligations........................ (1,671) (1,169) (1,058)
Discount assigned to stock warrants (see
note 9).................................... (50) -- --
------- ------- -------
Total long-term debt...................... 50,846 75,478 91,139
Less current portion........................ 1,075 1,000 1,000
------- ------- -------
Long-term debt excluding current portion.. $49,771 $74,478 $90,139
======= ======= =======
</TABLE>

The Company was party to a financial instrument in order to reduce its
exposure to fluctuations in interest rates. The agreement provided for the
third parties to make payments to the Company whenever a defined floating
interest rate exceeded 10 percent per annum. No such payments were made in
1995 or 1996. Payments on the interest rate cap agreements were based on the
notional principal amount of the agreements; no funds were actually borrowed
or are to be repaid as of December 31, 1996. The unamortized portion of the
purchase price was approximately $107,000 and $50,000 at December 31, 1995 and
1996, respectively. $5,000,000 under this interest rate cap agreement expired
in 1995 and the remaining $9,000,000 agreement expired in December 1997.

F-91
<PAGE>

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The aggregate annual maturities of long-term debt (not reduced for discount
rates on noninterest-bearing obligations) for each of the five years
subsequent to December 31, 1997 are as follows (in thousands):

<TABLE>
<CAPTION>
YEAR ENDING
DECEMBER 31,
------------
<S> <C>
1998................................. $ 1,000
1999................................. 2,250
2000................................. 6,457
2001................................. 5,000
2002................................. 8,300
Thereafter........................... 53,640
-------
$76,647
=======
</TABLE>

(7)FEDERAL INCOME TAXES

Income tax expense for the years ended December 31, 1995, 1996, and 1997
consisted of the following (in thousands):

<TABLE>
<CAPTION>
1995 1996 1997
------ ---- ----
<S> <C> <C> <C>
Current.................................................... $ -- $-- $--
Deferred................................................... (217) 303 801
------ ---- ----
$(217) $303 $801
====== ==== ====
</TABLE>

Income tax expense at December 31, 1995, 1996 and 1997 differed from the
amounts computed by applying the U.S. federal income tax rate of 34% to income
before taxes and extraordinary items as follows (in thousands):

<TABLE>
<CAPTION>
1995 1996 1997
----- ---- ----
<S> <C> <C> <C>
Computed "expected" tax expense (benefit).................. $(198) $272 $622
State taxes................................................ 29 28 30
Adjustment of prior taxes.................................. -- -- 112
Other...................................................... (48) 3 37
----- ---- ----
Total.................................................... $(217) $303 $801
===== ==== ====
</TABLE>

At December 31, 1997, the Company had net operating loss carryforwards
(NOLs) of approximately $14,285,000 for U.S. Federal income tax purposes. The
NOLs, if unused, will expire between 2008 and 2012. The portion of the NOLs
which existed prior to October 15, 1994 are subject to annual limitations
imposed by the Internal Revenue Code under Section 382. The current NOL
balance is subject to limitations should a change in ownership occur.

F-92
<PAGE>

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at December
31, 1996 and 1997 are as follows (in thousands):

<TABLE>
<CAPTION>
1996 1997
------ ------
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforward.............................. $3,472 $5,357
Accrued liabilities.......................................... 64 92
Other........................................................ 72 67
------ ------
Net deferred tax assets..................................... 3,608 5,516
------ ------
Deferred tax liability--rental towers and related fee based
assets, principally due to differences in basis for financial
reporting purposes and tax purposes.......................... 9,945 12,283
------ ------
Net deferred tax liability.................................. $6,337 $6,767
====== ======
</TABLE>

There is no valuation allowance at December 31, 1996 and 1997 recorded
against the deferred tax assets. It is the opinion of management that the
scheduled reversal of deferred tax liabilities, projected future taxable
income, and tax planning strategies will more likely than not result in the
realization of the deferred tax assets.

(8)REDEEMABLE PREFERRED STOCK

In December 1995, the Company completed a private placement offering to its
existing security holders to sell up to 22,500 newly created shares of Series
A Redeemable Preferred Stock, $0.01 par value (Series A Preferred Stock), at
$200 per share. Net proceeds to the Company were approximately $4,500,000.

The shares of Series A Preferred Stock were sold together with 10-year
warrants to purchase a total of 22,500 shares of common stock at a nominal
exercise price. The Company determined the warrants to have an estimated fair
value of $500,000 at the offering date which was recorded as additional paid-
in capital and a reduction of the outstanding Series A Preferred Stock. As of
December 31, 1997, all of these warrants had been exercised.

Each share of Series A Preferred Stock has a liquidation preference of $200
per share. The Company at its option can redeem any or all the outstanding
shares of preferred stock for $200 per share. The Company is required to
redeem all such shares at a price of $200 per share upon the occurrence of (i)
a public offering or (ii) a change of control. The preferred shares have no
voting or dividend rights.

(9)STOCKHOLDERS' EQUITY

In conjunction with the acquisition of Bowen-Smith Holdings, Inc., the
Company issued warrants to the senior subordinated debt holder for 12,462
shares of common stock with an exercise price of $.01 per share. This warrant
was immediately exercisable into common stock of the Company. The Company
determined this warrant to have an estimated market value of $600,000 at the
acquisition date which was recorded as additional paid-in capital and a
reduction of the outstanding principal of the senior subordinated note
payable. The Company recorded accretion of the debt discount of $75,000 and
$59,000 for the years ended December 31, 1995 and 1996, respectively. As
discussed further in note 6, the Company prepaid the senior subordinated debt
holder in connection with the October 1996 amendment and extension of the
Company's senior credit facility. The remaining unamortized debt discount of
$450,000 was included as an extraordinary loss on the consolidated statement
of operations for the year ended December 31, 1996. The senior subordinated
warrant holder could require the Company to purchase the stock warrants
beginning in October 2002. The put amount was defined in the warrant agreement
with the senior subordinated lender. At December 31, 1996, the accompanying
consolidated financial statements include an accrual for $174,000 related to
the put feature of the warrants granted to the senior subordinated lender.
These warrants were exercised and the put retired on June 30, 1997.

F-93
<PAGE>

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

During 1994, a warrant was also issued to a stockholder for 3,115 shares of
common stock with a nominal exercise price. Due to certain restrictions as to
the exercisability of this warrant, it was determined to have a value of
$75,000. This amount is reduced against the principal amount of the
subordinated note payable to stockholder. The Company recorded accretion of
the debt discount of $12,000 for each of the years ended December 31, 1995 and
1996. This warrant was exercised in 1997 in connection with the retirement of
the subordinated note payable to stockholder.

In June 1997, the Company completed a private placement offering of 36,049
shares of common stock with Clear Channel Communications, Inc. whereby the
Company raised proceeds of $23 million, net of issuance costs of approximately
$2 million.

(10)STOCK OPTION PLAN

In 1995, the Company adopted a stock option plan (the Plan) pursuant to
which the Company's Board of Directors may grant stock options to officers and
key employees. The Plan authorizes grants of options to purchase up to 9,231
shares of common stock. Stock options are granted with an exercise price equal
to the stock's fair market value at the date of grant. All stock options have
10-year terms and vest and become fully exercisable after a range of 3 to 4
years from the date of grant.

At December 31, 1997, there were 2,731 additional shares available for grant
under the Plan. The per share weighted-average value of stock options granted
during 1995, 1996, and 1997 was $37, $192, and $233, respectively, on the date
of grant, using the Black Scholes model with the following assumptions: risk-
free interest rate of 5.71% for the 1995 options, 6.58% for the 1996 options,
and 6.50% for the 1997 options, expected life of 8 years, expected volatility
of 0%, and an expected dividend yield of 0%.

The Company applies APB Opinion No. 25 in accounting for its Plan and,
accordingly, no compensation cost has been recognized for its stock options in
the consolidated financial statements. Had the Company determined compensation
cost based on the fair value at the grant date for its stock options under
SFAS No. 123, the Company's net income would have been reduced to the pro
forma amounts indicated below (in thousands):

<TABLE>
<CAPTION>
1995 1996 1997
----- ---- ----
<S> <C> <C> <C>
Net income (loss)
As reported................................................ $(572) $ 47 $377
Pro forma.................................................. (579) (231) 73
</TABLE>

At December 31, 1996, the range of exercise prices and weighted average
remaining contractual life of outstanding options was $100-$475, and 3.7
years, respectively. At December 31, 1997, the range of exercise prices and
weighted-average remaining contractual life of outstanding options was $100--
$475, and 7 years, respectively. Stock option activity during the periods
indicated is as follows:

<TABLE>
<CAPTION>
WEIGHTED AVERAGE
NUMBER OF SHARES EXERCISE PRICE
---------------- ----------------
<S> <C> <C>
Balance at December 31, 1994 -- $--
Granted................................... 1,100 100
----- ----
Balance at December 31, 1995............... 1,100 100
Granted................................... 4,600 475
Forfeited................................. (500) 100
----- ----
Balance at December 31, 1996............... 5,200 432
Granted................................... 1,300 475
Forfeited................................. -- --
----- ----
Balance at December 31, 1997............... 6,500 $440
===== ====
</TABLE>

F-94
<PAGE>

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

At December 31, 1996 and 1997, the number of options exercisable was 116 and
1,805, respectively, and the weighted-average exercise price of these options
was $100 and $392 per share respectively.

(11)RELATED PARTY TRANSACTIONS AND COMMITMENTS

LEASES

In the ordinary course of business the Company leases land and buildings
under long-term (ranging from one to ten years) operating leases. Total rent
expense relating to land and building leases was approximately $459,000,
$665,000, $1,285,000, $307,000 and $457,000 for the years ending December 31,
1995, 1996 and 1997 and the three months ended March 31, 1997 and 1998,
respectively.

Minimum future lease payments for the years ending December 31, are as follows
(in thousands):

<TABLE>
<S> <C>
1998................................................................ $ 1,517
1999................................................................ 1,363
2000................................................................ 1,223
2001................................................................ 1,271
2002................................................................ 829
Thereafter.......................................................... 4,237
-------
Total minimum lease payments...................................... $10,440
=======
</TABLE>

RELATED PARTY TRANSACTIONS

The Company has entered into consulting agreements with three shareholders.
The total management payments under these agreements was $300,000 for each of
the years ended December 31, 1996 and 1997, respectively, and future minimum
payments required by these management agreements are $300,000 and $262,500 for
the years ended December 31, 1998 and 1999, respectively.

The Company was subject to a management agreement, which was terminated
during 1997, with a private investment firm which is a significant shareholder
of the Company. The Company paid $127,000 and $342,725 to this investment firm
during the years ended December 31, 1996 and 1997, respectively. The Company's
president and chairman, as well as another director are the principal
executive officers in the private investment firm.

The Company leases land for certain of its tower sites from an entity owned
by a shareholder. During the years ended December 31, 1996 and 1997, rental
expense relating to these land leases totaled $35,000 and $63,000,
respectively. Additionally, prior to 1997, the Company leased its office
facility from the same entity. Annual expense for the office facility
approximated $48,000 per year. The same shareholder is President of a tower
fabrication and construction company. The Company has acquired the majority of
its new towers from this entity, and during the years ended December 31, 1996
and 1997, the Company made payments of $1,710,000 and $3,057,000 respectively,
to this entity.

F-95
<PAGE>

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(12)SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES

The Company had the following noncash financing and investing activities (in
thousands):

<TABLE>
<CAPTION>
1995 1996 1997
------ ----- -----
<S> <C> <C> <C>
Notes payable issued for tower acquisitions............. $8,164 2,361 --
Common stock issued for acquisitions.................... -- 4,127 1,000
Reduction of note payable in connection with disposal of
towers................................................. -- -- 700
Put accrual written-off................................. -- -- 174
Notes payable issued for noncompete agreements.......... 160 -- --
Accrued acquisition costs............................... 150 -- --
Accrued debt refinancing costs.......................... 100 -- --
</TABLE>

(13)MERGER AGREEMENT

In December 1997, the Company entered into a Merger Agreement with American
Tower Systems Corporation (ATS) which, subject to certain conditions, will
result in the merger of the Company into ATS. The merger is scheduled to be
completed during the first half of 1998.

F-96
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders
OPM-USA-INC.
Sarasota, Florida

We have audited the accompanying balance sheets of OPM-USA-INC. (the
"Company") as of December 31, 1997 and 1996, and the related statements of
operations, stockholders' equity (deficiency), and cash flows for the years
then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Company as of December 31, 1997 and
1996, and the results of its operations and its cash flows for the years then
ended in conformity with generally accepted accounting principles.

/s/ Deloitte & Touche LLP

Deloitte & Touche LLP
Boston, Massachusetts
March 2, 1998

F-97
<PAGE>

OPM-USA-INC.

BALANCE SHEETS

DECEMBER 31, 1997 AND 1996

<TABLE>
<CAPTION>
1997 1996
----------- ----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash................................................ $ 790,267 $ 28,673
Accounts receivable................................. 349,628 --
Prepaid expenses and other current assets........... 268,236 60,830
----------- ----------
Total current assets.............................. 1,408,131 89,503
PROPERTY AND EQUIPMENT, Net........................... 15,333,257 2,694,349
OTHER ASSETS.......................................... 93,776 91,049
----------- ----------
TOTAL................................................. $16,835,164 $2,874,901
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
CURRENT LIABILITIES:
Accounts payable.................................... $ 2,104,929 $ 708,003
Accrued compensation................................ 177,210 --
Accrued expenses.................................... 189,233 2,384
Deferred revenue.................................... 804,705 18,932
Current maturities of long-term debt................ 1,744 1,587
----------- ----------
Total current liabilities......................... 3,277,821 730,906
----------- ----------
LONG-TERM DEBT........................................ 16,333,310 1,600,853
----------- ----------
COMMITMENTS AND CONTINGENCIES......................... -- --
----------- ----------
STOCKHOLDERS' EQUITY (DEFICIENCY):
Common stock: $1.00 par value; 100 shares
authorized; 100 shares issued and outstanding
(including treasury shares)........................ 100 100
Additional paid-in capital.......................... 999,956 999,956
Accumulated deficit................................. (2,276,023) (456,914)
Treasury stock, at cost, 10 shares at December 31,
1997............................................... (1,500,000) --
----------- ----------
Total stockholders' equity (deficiency)........... (2,775,967) 543,142
----------- ----------
TOTAL................................................. $16,835,164 $2,874,901
=========== ==========
</TABLE>

See notes to financial statements.

F-98
<PAGE>

OPM-USA-INC.

STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 1997 AND 1996

<TABLE>
<CAPTION>
1997 1996
----------- ---------
<S> <C> <C>
REVENUES--Tower revenue................................ $ 863,258 $ 60,402
EXPENSES:
Operating expenses, excluding depreciation and amor-
tization............................................ 1,145,699 280,868
Depreciation and amortization........................ 428,499 43,230
General and administrative expenses.................. 488,496 138,967
----------- ---------
OPERATING LOSS......................................... (1,199,436) (402,663)
----------- ---------
OTHER INCOME (EXPENSE):
Interest expense..................................... (635,956) (17,625)
Other income......................................... 16,283 7,621
----------- ---------
Total other expense................................ (619,673) (10,004)
----------- ---------
NET LOSS............................................... $(1,819,109) $(412,667)
=========== =========
</TABLE>

See notes to financial statements.

F-99
<PAGE>

OPM-USA-INC.

STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)

YEARS ENDED DECEMBER 31, 1997 AND 1996

<TABLE>
<CAPTION>
ADDITIONAL
COMMON PAID-IN ACCUMULATED TREASURY
STOCK CAPITAL DEFICIT STOCK TOTAL
------ ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1,
1996................... $100 $ 3,281 $ (44,247) $ -- $ (40,866)
Net loss.............. -- -- (412,667) -- (412,667)
Contributed capital... -- 996,675 -- -- 996,675
---- -------- ----------- ----------- -----------
BALANCE, DECEMBER 31,
1996................... 100 999,956 (456,914) -- 543,142
Net loss.............. -- -- (1,819,109) -- (1,819,109)
Acquisition of trea-
sury stock........... -- -- -- (1,500,000) (1,500,000)
---- -------- ----------- ----------- -----------
BALANCE, DECEMBER 31,
1997................... $100 $999,956 $(2,276,023) $(1,500,000) $(2,775,967)
==== ======== =========== =========== ===========
</TABLE>

See notes to financial statements.

F-100
<PAGE>

OPM-USA-INC.

STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 1997 AND 1996

<TABLE>
<CAPTION>
1997 1996
------------ -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss........................................... $ (1,819,109) $ (412,667)
Adjustments to reconcile net loss to net cash pro-
vided by operating activities:
Depreciation and amortization..................... 428,499 43,230
Interest expense added to loan principal.......... 2,400 900
Changes in operating assets and liabilities:
Prepaid expenses and other current assets....... (207,406) (60,830)
Accounts receivable............................. (349,628) --
Loan origination costs.......................... (35,000) (88,167)
Accounts payable and accrued expenses........... 1,760,985 655,049
Deferred revenue................................ 785,773 18,932
------------ -----------
Net cash provided by operating activities......... 566,514 156,447
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES--
Purchase of property and equipment................. (13,034,977) (2,736,879)
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital contributions.............................. -- 996,675
Purchase of treasury stock......................... (1,500,000) --
Proceeds from long-term debt....................... 14,731,638 1,602,556
Repayment of long-term debt........................ (1,581) (126)
------------ -----------
Net cash provided by financing activities.......... 13,230,057 2,599,105
------------ -----------
INCREASE IN CASH.................................... 761,594 18,673
CASH, BEGINNING OF YEAR............................. 28,673 10,000
------------ -----------
CASH, END OF YEAR................................... $ 790,267 $ 28,673
============ ===========
</TABLE>

See notes to financial statements.

F-101
<PAGE>

OPM-USA-INC.

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 1997 AND 1996

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General--OPM-USA-INC. (the "Company") develops and manages telecommunication
antenna site facilities in the Southeastern United States.

Sale of Company--In September 1997, the Company's stockholders entered into
an agreement to sell their common stock to American Tower Systems, Inc.
("ATSI") for a maximum purchase price of $105,000,000. The purchase price is
contingent upon the actual number of towers to be built on sites identified by
OPM and the cash flows generated from those towers. Approximately $21,300,000
was paid at closing. The sale closed on January 8, 1998. ATSI also agreed to
provide financing on identified sites which are in various stages of receiving
site permits to enable an additional 190 towers to be constructed. The
aggregate amount of this financing is limited to $37,000,000, of which
$5,784,156 was outstanding at December 31, 1997.

Concentration of Credit Risk--The Company performs ongoing credit evaluation
of its customers' financial condition. As of December 31, 1997, there are
three customers which individually comprise approximately 47%, 17% and 16% of
the Company's total revenue.

Use of Estimates--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Property and Equipment--Property and equipment is stated at cost, less
accumulated depreciation. Repairs and maintenance are charged to expense in
the year incurred. Depreciation for financial statement purposes is computed
using the straight-line method over the estimated useful lives of the assets.
Telecommunication towers and antenna site equipment are depreciated over a
period of 15 years, and office furniture, equipment, and automobiles are
depreciated over the useful lives of the assets ranging from 5 to 7 years.

Construction in Progress--The Company's tower construction expenditures are
recorded as construction in progress until the assets are placed in service.
The Company capitalizes subcontractor employee labor and overhead costs
incurred in connection with the construction of towers. As assets are placed
in service, they are transferred to the appropriate property and equipment
category and depreciation commences.

Other Assets--Other assets consist principally of deferred financing costs
which are being amortized over a three-year period. Accumulated amortization
aggregated $35,500 and $3,200 at December 31, 1997 and 1996, respectively.

Long-Lived Assets--The Company records impairment losses on long-lived
assets if events and circumstances indicate that the assets might be impaired.
Recoverability of long-lived assets is determined by periodically comparing
the forecasted, undiscounted net cash flows of the operations to which the
assets relate to the carrying amount. Through December 31, 1997, no
impairments requiring adjustments have occurred.

Revenue Recognition and Deferred Revenue--Tower revenues are recognized as
earned. Deferred revenue is recorded when tower rents are paid in advance of
performance.

Income Taxes--The Company is an S corporation for federal and state income
tax purposes. The stockholders report any income or loss of the Company
directly on their personal tax returns.

F-102
<PAGE>

OPM-USA-INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

YEARS ENDED DECEMBER 31, 1997 AND 1996

2. PROPERTY AND EQUIPMENT

Property and equipment consist of the following at December 31:

<TABLE>
<CAPTION>
1997 1996
----------- ----------
<S> <C> <C>
Land.............................................. $ 575,102 $ 110,000
Telecommunication towers and antenna site equip-
ment............................................. 11,525,984 1,559,302
Office furniture, equipment and automobiles....... 326,439 109,893
Construction in progress.......................... 3,342,056 955,243
----------- ----------
Total........................................... 15,769,581 2,734,438
Less accumulated depreciation..................... (436,324) (40,089)
----------- ----------
Property and equipment, net....................... $15,333,257 $2,694,349
=========== ==========
</TABLE>

3. COMMITMENTS AND CONTINGENCIES

Lease Obligations--The Company leases office and antenna site facilities
under various operating lease agreements expiring through the year 2016. The
Company is committed to minimum rental payments under leases (exclusive of
real estate taxes, maintenance and other related charges) at December 31,
1997, as follows:

<TABLE>
<CAPTION>
YEARS ENDING DECEMBER 31:
-------------------------
<S> <C>
1998.......................................................... $ 715,623
1999.......................................................... 737,092
2000.......................................................... 759,205
2001.......................................................... 781,981
2002.......................................................... 805,440
Thereafter.................................................... 14,176,317
-----------
Total......................................................... $17,975,658
===========
</TABLE>

Rent expense charged to operations for the years ended December 31, 1997 and
1996 amounted to $277,600 and $43,500, respectively.

Contract Obligations--The Company has contract obligations for the erection
of tower sites of $4,531,000 at December 31, 1997.

Litigation--The Company periodically becomes involved in various claims and
lawsuits that are incidental to its business. In the opinion of management,
there are no matters currently pending which would, in the event of adverse
outcome, have a material impact on the Company's financial position, the
results of operations or liquidity.

4. CUSTOMER LEASES

The Company leases space on its tower properties to customers for set
periods of time. Long-term leases typically contain provisions for renewals
and specified rent increases over the lease terms. The Company has minimum
lease commitments from its customers under these leases at December 31, 1997,
as follows:

F-103
<PAGE>

OPM-USA-INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

YEARS ENDED DECEMBER 31, 1997 AND 1996

<TABLE>
<CAPTION>
YEARS ENDING DECEMBER 31:
-------------------------
<S> <C>
1998.......................................................... $ 1,375,980
1999.......................................................... 1,384,847
2000.......................................................... 1,394,065
2001.......................................................... 1,403,636
2002.......................................................... 1,582,977
Thereafter.................................................... 10,171,488
-----------
$17,312,993
===========
</TABLE>

5. RELATED-PARTY TRANSACTIONS

The Corporation has engaged with Atlantic Tower Construction, Inc. ("ATC"), a
corporation 100% owned by the Company's existing stockholder, to construct
certain telecommunication antenna site facilities. Payments to ATC aggregated
$922,700 and $617,000 for the years ended December 31, 1997 and 1996,
respectively.

In January 1998, the Company's stockholder paid bonuses aggregating $600,000
to certain employees of the Company in connection with the sale of the Company.
Such amounts will be expensed by the Company in 1998.

6. LONG-TERM DEBT

<TABLE>
<CAPTION>
1997 1996
----------- ----------
<S> <C> <C>
Unsecured loan payable to stockholder, Owen P.
Mills, in the original amount of $937,786, with
no repayment terms, including interest at the
rate of 8% per annum............................. $ 1,144,249 $ 972,110
Secured loan payable to Suntrust Bank in the
original amount of $575,000. Suntrust Bank has
made available a nonrevolving credit facility in
an amount not to exceed $10,000,000 for sites and
fully constructed antenna towers located thereon.
The loan matures in three years, at which time
the principal balance and accrued interest are
payable in full. The rate of interest accrues on
the outstanding principal balance of the loan
based on a floating rate equal to 3% above the
LIBOR rates...................................... 9,350,500 575,000
Secured loan payable to ATSI for financing con-
struction of antenna towers and sites, including
interest at a rate of 11.5% per annum............ 5,784,156 --
Unsecured mortgage loan payable to
Goodwin/Woodhouse in the original amount of
$25,000; interest payable at the rate of 9.5% per
annum, due November 30, 2006..................... 23,293 24,874
Secured loan payable to Huntington Bank in the
original amount of $30,000, interest accrued at
the rate of 8% per annum, principal and interest
due March 31, 2013............................... 32,856 30,456
----------- ----------
Total............................................. 16,335,054 1,602,440
Less current maturities........................... (1,744) (1,587)
----------- ----------
Long-term debt--net............................... $16,333,310 $1,600,853
=========== ==========
</TABLE>

In connection with the sale of the Company, the loans to the stockholder,
Suntrust Bank and ATS were paid in full (see Note 1).

* * * * * *

F-104
<PAGE>

- --------------------------------------------------------------------------------

PROSPECTIVE INVESTORS MAY RELY ON THE INFORMATION CONTAINED IN THIS PROSPEC-
TUS. NEITHER AMERICAN TOWER CORPORATION, THE SELLING STOCKHOLDERS NOR ANY UN-
DERWRITER HAS AUTHORIZED ANYONE TO PROVIDE PROSPECTIVE INVESTORS WITH INFORMA-
TION DIFFERENT FROM THAT CONTAINED IN THIS PROSPECTUS. THIS PROSPECTUS IS NOT
AN OFFER TO SELL NOR IS IT SEEKING AN OFFER TO BUY THESE SECURITIES IN ANY JU-
RISDICTION WHERE THE OFFER IS NOT PERMITTED. THE INFORMATION CONTAINED IN THIS
PROSPECTUS IS CORRECT ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE
TIME OF DELIVERY OF THIS PROSPECTUS OR ANY SALE OF THESE SECURITIES.

NO ACTION IS BEING TAKEN IN ANY JURISDICTION OUTSIDE THE UNITED STATES TO
PERMIT A PUBLIC OFFERING OF THE CLASS A COMMON STOCK OR POSSESSION OR DISTRIBU-
TION OF THIS PROSPECTUS IN ANY SUCH JURISDICTION. PERSONS WHO COME INTO POSSES-
SION OF THIS PROSPECTUS IN JURISDICTIONS OUTSIDE THE UNITED STATES ARE REQUIRED
TO INFORM THEMSELVES ABOUT AND TO OBSERVE ANY RESTRICTIONS AS TO THIS OFFERING
AND THE DISTRIBUTION OF THIS PROSPECTUS APPLICABLE IN THAT JURISDICTION.

-----------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Presentation of Information.............................................. ii
Forward-Looking Statements............................................... ii
Prospectus Summary....................................................... 1
Risk Factors............................................................. 11
Use of Proceeds.......................................................... 17
Market Prices and Dividend Policy........................................ 17
Capitalization........................................................... 18
Dilution................................................................. 20
Unaudited Pro Forma Condensed Consolidated
Financial Statements of ATS............................................. 21
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 32
Industry Overview........................................................ 41
Business................................................................. 44
Management............................................................... 57
Principal and Selling Stockholders....................................... 63
Relationship between ATS and ARS......................................... 67
Indebtedness of ATS...................................................... 72
Description of Capital Stock............................................. 74
Shares Eligible for Future Sale.......................................... 77
Underwriting............................................................. 78
Notice to Canadian Residents............................................. 79
Validity of the Shares................................................... 80
Experts.................................................................. 81
Available Information.................................................... 82
Index to Financial Statements............................................ F-1
Financial Statements..................................................... F-3
</TABLE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

LOGO
American Tower

23,619,871 Shares of
Class A Common Stock
($.01 par value)

PROSPECTUS

CREDIT SUISSE FIRST BOSTON
BT ALEX. BROWN
LEHMAN BROTHERS
MORGAN STANLEY DEAN WITTER
BEAR, STEARNS & CO. INC.
MERRILL LYNCH & CO.
SALOMON SMITH BARNEY

- --------------------------------------------------------------------------------
<PAGE>

AMERICAN TOWER SYSTEMS CORPORATION
REGISTRATION STATEMENT ON FORM S-1

PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

<TABLE>
<S> <C>
Securities and Exchange Commission fee....................... $ 142,641
New York Stock Exchange annual fee........................... 60,000
New York Stock Exchange listing fee.......................... 60,000
NASD Review fee.............................................. 30,500
Printing and engraving fees.................................. 500,000
Accountants' fees and expenses............................... 300,000
Legal fees and expenses...................................... 300,000
Miscellaneous................................................ 106,859
----------
Total........................................................ $1,500,000
==========
</TABLE>

The foregoing, except for the Securities and Exchange Commission, NYSE and
NASD fees, are estimated.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 145 of the Delaware General Corporation Law (the "DGCL") provides,
in effect, that any person made a party to any action by reason of the fact
that he is or was a director, officer, employee or agent of ATS may and, in
certain cases, must be indemnified by ATS against, in the case of a non-
derivative action, judgments, fines, amounts paid in settlement and reasonable
expenses (including attorney's fees), if in either type of action he acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of ATS and, in a non-derivative action, which involves a
criminal proceeding, in which such person had no reasonable cause to believe
his conduct was unlawful. This indemnification does not apply, in a derivative
action, to matters as to which it is adjudged that the director, officer,
employee or agent is liable to ATS, unless upon court order it is determined
that, despite such adjudication of liability, but in view of all the
circumstances of the case, he is fairly and reasonably entitled to indemnity
for expenses.

Article XII of ATS's By-Laws provides that ATS shall indemnify each person
who is or was an officer or director of ATS to the fullest extent permitted by
Section 145 of the DGCL.

Article Sixth of the ATS's Restated Certificate states than no director of
ATS shall be personally liable to ATS or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for (i) breach of the
director's duty of loyalty to ATS or its stockholders, (ii) acts or omissions
non in good faith or which involve intentional misconduct or knowing violation
of law, (iii) liability under Section 174 of the DGCL relating to certain
unlawful dividends and stock repurchases, or (iv) any transaction from which
the director derived an improper personal benefit.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

Pursuant to that certain American Tower Systems Corporation Stock Purchase
Agreement, dated as of January 8, 1998, by and among ATS and the Purchasers
thereto, ATS consummated an equity financing involving the issuance of an
aggregate of 1,350,050 shares of Class A Common Stock, 4,649,950 shares of
Class B Common Stock and 2,000,000 shares of Class C Common Stock at $10.00
per share in exchange for an aggregate of $49.4 million of notes secured by
common stock of American Radio Systems Corporation having a market value of
not less than 175% of the principal amount and accrued and unpaid interest on
such notes.

II-1
<PAGE>

Pursuant to that certain Agreement and Plan of Merger, dated as of November
21, 1997, as amended, by and among ATS, American Tower Systems, Inc., a
Delaware corporation ("ATSI"), Gearon & Co., Inc., a Georgia corporation
("Gearon") and J. Michael Gearon, Jr., pursuant to which ATSI was merged with
and into Gearon, with ATSI as the surviving corporation, and ATS issued an
aggregate of 5,333,333 shares of Class A Common Stock and paid approximately
$32.0 million in cash for an aggregate agreed upon consideration of
approximately $80.0 million.

In June 1998, ATS issued in a private placement to institutional investors
$ . million of Interim Preferred Stock pursuant to the Interim Financing
Agreement.

All of the shares referred to in the foregoing paragraphs were issued by ATS
in reliance on the exemption from registration provided by Section 4(2) of the
Securities Act of 1933, as amended (the "Securities Act"). Each holder
represented that it was acquiring its shares for investment purposes and not
with a view to distribution within the meaning of the Securities Act. The
stock certificates issued to all such holders bore restrictive legends. No
commission or other remuneration will be paid or given by ATS directly or
indirectly in connection with any of the foregoing transactions.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

Listed below are the exhibit which are filed as part of this registration
statement (according to the number assigned to them in Item 601 of Regulation
S-K). Each exhibit marked by a (*) is incorporated by reference to ATS's
Registration Statement on Form S-4 (File No. 333-46025) filed on February 10,
1998. Each exhibit marked by a (+) is incorporated by reference to the
original filing of this Registration Statement (No. 333-52481) with the
Commission on May 12, 1998. Each exhibit marked by a (++) is incorporated by
reference to ATS's Registration Statment on Form S-1 (File No. 333-50111)
filed on May 8, 1998. Exhibit numbers in parenthesis refer to the exhibit
number in the applicable Registration Statement.

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF DOCUMENT EXHIBIT FILE NO.
----------- --------------------------------------- ------------------------
<C> <S> <C>
1.1 Form of Underwriting Agreement By and
Among the Company and the
Representatives of the Underwriters,
dated , 1998......................... To be filed by amendment
2.1 Agreement and Plan of Merger, dated as
of November 21, 1997, by and among
American Tower Systems Corporation
("ATS"), American Tower Systems, Inc.,
a Delaware corporation ("ATSI"), Gearon
& Co., Inc., a Georgia corporation
("Gearon") and J. Michael Gearon, Jr.
(the "Gearon Stockholder"). (Schedules
and Exhibits omitted).................. (*2.1)
2.2 Amendment No. 1 to Agreement and Plan
of Merger, dated as of January 22,
1998, among ATS, American Tower Systems
(Delaware), Inc., a Delaware
corporation (formerly known as American
Tower Systems, Inc.), Gearon and the
Gearon Stockholder..................... (*2.2)
2.3 Agreement and Plan of Merger, dated as
of December 12, 1997, by and among ATS
and American Tower Corporation, a
Delaware corporation. (Schedules and
Exhibits omitted)...................... (*2.3)
3(i).1 Restated Certificate of Incorporation
of ATS, as filed with the Secretary of
State of the State of Delaware on
November 20, 1997...................... (*3(i).1)
3(ii).2 By-Laws of ATS......................... (*3(i).2)
3(ii).3 Certificate of Amendment to Restated
Certificate of Incorporation of ATS, as
filed with the Secretary of State of
the State of Delaware on April 28,
1998................................... (+3(ii).3)
3(ii).4 Certificates of Designation relating to
Interim Preferred and Exchange
Preferred Stock........................ To be filed by amendment
3(ii).5 Restated Certificate of Incorporation
of ATS, as filed with the Secretary of
State of the State of Delaware on June
, 1998................................ To be filed by amendment
5 Form of Opinion of Sullivan & Worcester
LLP.................................... (+5)
</TABLE>

II-2
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF DOCUMENT EXHIBIT FILE NO.
----------- --------------------------------------- ------------------------
<C> <S> <C>
10.1 Parent Loan Agreement, dated as of June
, 1998, by and among ATS, Toronto
Dominion (Texas), Inc., as
Administrative Agent, and the other
Banks parties thereto.................. To be filed by amendment
10.2 ATS Facility A Loan Agreement, dated as
of June , 1998 among American Tower
Systems, L.P. and American Tower
Systems (Delaware), Inc., as borrowers,
and Toronto Dominion (Texas), Inc., as
Administrative Agent, and the other
Banks parties thereto.................. To be filed by amendment
10.3 First Amendment to Amended and Restated
Loan Agreement,
dated as of December 31, 1997, by and
among ATSI, Toronto Dominion (Texas),
Inc., as Administrative Agent and the
Banks parties thereto ................. (*10.3)
10.4 Assumption Agreement, dated as of
January 22, 1998, by and among ATS,
ATSI, American Tower Systems, L.P., a
Delaware limited partnership, Toronto
Dominion (Texas), Inc., as
Administrative Agent and the Banks
parties thereto........................ (*10.4)
10.5 Asset Purchase Agreement, dated as of
February 5, 1997, by and between ATSI
and Meridian Radio Sites, a California
general partnership ("Meridian Radio").
(Schedules and Exhibits omitted)....... (*10.5)
10.6 First Amendment to Asset Purchase
Agreement, dated as of February 10,
1997, by and between ATSI and Meridian
Radio.................................. (*10.6)
10.7 Second Amendment to Asset Purchase
Agreement, dated as of June 24, 1997,
by and between ATSI and Meridian
Radio.................................. (*10.7)
10.8 Asset Purchase Agreement, dated as of
February 5, 1997, by and between ATSI
and Meridian Sales and Services
Company, a California corporation
("Meridian Sales"). (Schedules and
Exhibits omitted)...................... (*10.8)
10.9 First Amendment to Asset Purchase
Agreement, dated as of February 10,
1997, by and between ATSI and Meridian
Sales.................................. (*10.9)
10.10 Second Amendment to Asset Purchase
Agreement, dated as of June 24, 1997,
by and between ATSI and Meridian
Sales.................................. (*10.10)
10.11 Asset Purchase Agreement, dated as of
February 5, 1997, by and between ATSI
and Meridian Communications North, a
California general partnership
("Meridian North"). (Schedules and
Exhibits omitted)...................... (*10.11)
10.12 First Amendment to Asset Purchase
Agreement, dated as of February 10,
1997, by and between ATSI and Meridian
North.................................. (*10.12)
10.13 Second Amendment to Asset Purchase
Agreement, dated as of June 24, 1997,
by and between ATSI and Meridian
North.................................. (*10.13)
10.14 Asset Purchase Agreement, dated as of
May 13, 1997, by and between ATSI and
Towers L.L.C., a South Carolina limited
liability company. (Schedules and
Exhibits omitted, except for Employment
Agreement)............................. (*10.14)
10.15 Asset Purchase Agreement, dated as of
May 21, 1997, by and between ATSI and B
& E Associates, Inc., a Massachusetts
corporation. (Schedules and Exhibits
omitted)............................... (*10.15)
10.16 Asset Purchase Agreement, dated as of
May 21, 1997, by and between ATSI and
DB Consultants, Inc., a Texas
corporation. (Schedules and Exhibits
omitted)............................... (*10.16)
10.17 Asset Purchase Agreement, dated as of
May 27, 1997, by and between ATSI and
Communication Systems Development,
Inc., a California corporation.
(Schedules and Exhibits omitted)....... (*10.17)
</TABLE>

II-3
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
EXHIBIT NO. DESCRIPTION OF DOCUMENT FILE NO.
----------- ----------------------------------------------------- ---------
<C> <S> <C>
10.18 Agreement of Limited Liability Company of
Communication Systems Development, LLC, dated May 30,
1997, by and among ATSI and Communications
Development Corporation, Inc., a California
corporation.......................................... (*10.18)
10.19 Asset Purchase Agreement, dated as of June 25, 1997,
by and between ATSI and Fernand E. Phaneuf, Jr. and
Lorraine Phaneuf, being all of the shareholders of
Tower Sites, Inc., d/b/a Tower Sites, Inc. a
Connecticut corporation. (Schedules and Exhibits
omitted)............................................. (*10.19)
10.20 Asset Purchase Agreement, dated as of July 8, 1997,
by and between ATSI and Diablo Communications, Inc.,
a California corporation. (Schedules and Exhibits
omitted)............................................. (*10.20)
10.21 Asset Purchase Agreement, dated as of July 8, 1997,
by and between ATSI and Diablo Communications of
Southern California, Inc., a California corporation.
(Schedules and Exhibits omitted)..................... (*10.21)
10.22 Asset Purchase Agreement, dated as of July 8, 1997,
by and between ATS and Suburban Cable T.V. Co........ (*10.22)
10.23 Asset Purchase Agreement, dated as of July 31, 1997,
by and between ATSI and John C. Santangelo and Gerald
Harkins, being all of the shareholders of Southeast
Communications, Inc., and Southeast Communications,
Inc., a Massachusetts corporation. (Schedules and
Exhibits omitted).................................... (*10.23)
10.24 Stock Purchase Agreement, date as of September 30,
1997, by and between ATSI, OPM-USA-INC., a Florida
corporation ("OPM"), and the Stockholders of OPM.
(Schedules and Exhibits omitted)..................... (*10.24)
10.25 Asset Purchase Agreement, dated as of October 4,
1997, by and between ATSI and Tucson Communications
Company, L.P., a California limited partnership.
(Schedules and Exhibits omitted)..................... (*10.25)
10.26 American Tower Systems Corporation 1997 Stock Option
Plan, dated as of November 5, 1997, as amended and
restated on April 28, 1998........................... (++10.26)
10.27 American Tower Systems Corporation Stock Purchase
Agreement, dated as of January 8, 1998, by and among
ATS and the Purchasers............................... (*10.27)
10.28 Employment Agreement, dated as of January 22, 1988,
by and between ATSI and J. Michael Gearon, Jr........ (*10.28)
10.29 Asset Purchase Agreement, dated as of January 23,
1998, by and among ATSI, Midcontinent Media, Inc., a
South Dakota corporation ("Midcontinent"),
Midcontinent Teleport Co., a South Dakota corporation
and a wholly-owned subsidiary of Midcontient ("MTC"),
Wit Communications, Inc., a Delaware corporation and
a wholly-owned subsidiary of MTC, and Washington
International Teleport, Inc., a Delaware corporation
and a wholly-owned subsidiary of Wit................. (*10.29)
</TABLE>

II-4
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF DOCUMENT EXHIBIT FILE NO.
----------- ------------------------------ --------------------------------
<C> <S> <C>
10.30 ARS-ATS Separation Agreement,
dated as of June . , 1998 by
and among American Radio
Systems Corporation, a
Delaware Corporation ("ARS"),
ATS, and CBS Corporation
(formerly Westinghouse
Electric Corporation), a
Pennsylvania corporation
("CBS")....................... To be filed by amendment
10.31 Interim Financing Agreement,
dated as of ., 1998, by and
among ATS and Credit Suisse
First Boston.................. To be filed by amendment
10.32 Commitment Letter, dated .,
1998, with respect to Interim
Financing from Credit Suisse
First Boston ................. To be filed by amendment
21 Subsidiaries of ATS........... (*21)
23.0 Consents of Sullivan & Contained in the opinion of
Worcester LLP................. Sullivan & Worcester LLP filed
herewith as part (+5)
23.1 Independent Auditor's
Consents--Deloitte & Touche
LLP........................... Filed herewith as Exhibit 23.1
23.2 Consent of Pressman Ciocca
Smith LLP..................... Filed herewith as Exhibit 23.2
23.3 Consent of Rooney, Ida, Nolt &
Ahern......................... Filed herewith as Exhibit 23.3
23.4 Consent of KPMG Peat Marwick
LLP........................... Filed herewith as Exhibit 23.4
23.5 Consent of Ernst & Young LLP.. Filed herewith as Exhibit 23.5
24 Power of Attorney............. Filed as page II-7 of the
Registration Statement as
originally filed on May 12, 1998
27 Financial Data Schedule....... (+27)
</TABLE>

ITEM 17. UNDERTAKINGS.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at the time shall be
deemed to be the initial bona fide offering thereof.

II-5
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-1 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Boston, Commonwealth of Massachusetts, on the 29th
day of May, 1998.

AMERICAN TOWER SYSTEMS CORPORATION

/s/ Steven B. Dodge*
By: ____________________________________
STEVEN B. DODGE
CHAIRMAN OF THE BOARD,
PRESIDENT AND CHIEF EXECUTIVE OFFICER

<TABLE>
<S> <C>
SIGNATURE TITLE
DATE

/s/ Steven B. Dodge* Chairman, President, May 29, 1998
- --------------------------------- Chief Executive Officer
STEVEN B. DODGE and Director

/s/ Joseph L. Winn* Chief Financial Officer May 29, 1998
- --------------------------------- and Director
JOSEPH L. WINN

/s/ Justin D. Benincasa Vice President and May 29, 1998
- --------------------------------- Corporate Controller
JUSTIN D. BENINCASA

*Individually and as
Attorney-in-Fact
/s/ Alan L. Box* Chief Operating Officer May 29, 1998
- --------------------------------- and Director
ALAN L. BOX
</TABLE>

II-6
<PAGE>

<TABLE>
<S> <C>
/s/ Arnold L. Chavkin* Director May 29, 1998
- ---------------------------------
ARNOLD L. CHAVKIN

/s/ J. Michael Gearon, Jr.* Executive Vice President May 29, 1998
- --------------------------------- and Director
J. MICHAEL GEARON, JR.

/s/ Thomas H. Stoner* Director May 29, 1998
- ---------------------------------
THOMAS H. STONER
</TABLE>

II-7
<PAGE>

SCHEDULE I

AMERICAN TOWER SYSTEMS CORPORATION
(PARENT COMPANY ONLY)

CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED BALANCE SHEETS

DECEMBER 31, 1996 AND 1997 AND MARCH 31, 1998

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
------------------------- ------------
1996 1997 1998
----------- ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Investments in and advances to subsidi-
aries................................. $30,536,512 $154,187,760 235,792,363
Deferred income taxes, current......... -- 62,560 62,560
Deferred income taxes, long-term....... 123,272,646
----------- ------------ ------------
Total............................ $30,536,512 $154,250,320 359,127,569
=========== ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Due to Parent.......................... $125,210,000
Deferred income taxes.................. $ 279,218 $ 417,628 --
Minority interest in subsidiaries...... 528,928 625,652 600,240
Commitments and Contingencies.......... -- -- --
Stockholders' Equity (Note Below):
Preferred Stock; $0.01 par value;
20,000,000 shares
authorized; no shares issued or out-
standing............................
Common Stock, $.01 par value,
10,000,000 shares
authorized, 3,000 shares issued and
outstanding in 1996................. 30 --
Class A Common Stock; $.01 par value;
200,000,000 shares authorized;
29,667,883 and 36,351,266 shares is-
sued and outstanding, respectively.. -- 296,679 363,513
Class B Common Stock; $.01 par value;
50,000,000 shares authorized;
4,670,626 and 9,320,576 shares is-
sued and outstanding, respectively.. -- 46,706 93,206
Class C Common Stock; $.01 par value;
10,000,000 shares authorized;
1,295,518 and 3,295,518 shares is-
sued and outstanding, respectively.. -- 12,955 37,955
Notes receivable, due from stockhold-
ers................................. (49,375,000)
Additional paid-in capital........... 30,318,420 155,710,741 286,589,686
Accumulated deficit.................. (590,084) (2,860,041) (4,387,031)
----------- ------------ ------------
Total stockholders' equity......... 29,728,366 153,207,040 233,317,329
----------- ------------ ------------
Total............................ $30,536,512 $154,250,320 359,127,569
=========== ============ ============
</TABLE>

Note: Please see page F-4, "Consolidated Statements of Stockholder's Equity,"
for activity occurring in the equity section of American Tower Systems
Corporation (ATS).

Note: ATS is currently a wholly-owned subsidiary of American Radio Systems
Corporation. In connection with a loan agreement maintained by the ATS'
wholly owned subsidiary, American Tower Systems (Delaware), Inc., ATS
has pledged its interest in such subsidiary.

S-1
<PAGE>

SCHEDULE I
AMERICAN TOWER SYSTEMS CORPORATION
(PARENT COMPANY ONLY)

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

CONDENSED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER THREE MONTHS
PERIOD FROM 31, ENDED MARCH 31,
JULY 17, 1995 TO ---------------------- ----------------------
DECEMBER 31, 1995 1996 1997 1997 1998
----------------- --------- ----------- --------- ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues................ $ -- $ -- $ -- $ -- $ --
Equity in net loss of
subsidiaries........... (110,411) (479,673) (2,269,957) (57,954) (1,526,990)
--------- --------- ----------- --------- ------------
Net Loss................ $(110,411) $(479,673) $(2,269,957) $(57,954) $(1,526,990)
========= ========= =========== ========= ============
</TABLE>

CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
THREE MONTHS
PERIOD FROM YEAR ENDED DECEMBER 31, ENDED MARCH 31,
JULY 17, 1995 TO -------------------------- -----------------------
DECEMBER 31, 1995 1996 1997 1997 1998
----------------- ----------- ------------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net loss................ $(110,411) $ (479,673) $ (2,269,957) $(57,954) $(1,526,990)
Adjustments to reconcile
net loss to cash flows
from operating
activities:
Equity in net losses
of subsidiaries...... 110,411 479,673 2,269,957 57,954 1,526,990
--------- ----------- ------------- ---------- -----------
Cash flows from oper-
ating activities..... -- -- -- -- --
--------- ----------- ------------- ---------- -----------
CASH FLOWS FROM
INVESTING ACTIVITIES:
Cash transfers to Par-
ent.................... (179,426) (4,866,226) (16,650,000) -- (29,800,000)
Investment by Parent.... 242,215 2,548,557 143,073,631 2,543,171 28,684,995
--------- ----------- ------------- ---------- -----------
Cash flows from in-
vesting activities... 62,789 (2,317,669) 126,423,631 2,543,171 (1,115,005)
--------- ----------- ------------- ---------- -----------
CASH FLOWS FROM
FINANCING ACTIVITIES:
Cash transfers from sub-
sidiary................ 179,426 4,866,226 16,650,000 -- 29,800,000
Investments in subsidi-
ary.................... (242,215) (2,548,557) (143,073,631) (2,543,171) (28,684,995)
--------- ----------- ------------- ---------- -----------
Cash flows from fi-
nancing activities... (62,789) 2,317,669 (126,423,631) (2,543,171) 1,115,005
--------- ----------- ------------- ---------- -----------
CASH AND CASH
EQUIVALENTS............ $ -- $ -- $ -- $ -- $ --
========= =========== ============= ========== ===========
</TABLE>

Note: As of December 31, 1997, ATS was a holding company whose only asset
consists of the stock of its wholly owned subsidiary American Tower
Systems (Delaware), Inc. (ATSI). As of such date, ATSI held all operating
assets of the consolidated group. ATS' income or loss is limited to the
income or loss of ATSI, after elimination of income or loss attributable
to minority investors in subsidiaries and investments of ATSI.

S-2
<PAGE>

SCHEDULE II

AMERICAN TOWER SYSTEMS CORPORATION AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS

PERIOD FROM JULY 17, 1995 (INCORPORATION) TO DECEMBER 31, 1995,

THE YEARS ENDED DECEMBER 31, 1996 AND 1997 AND THE THREE MONTHS ENDED MARCH 31,
1998

<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
---------- ---------- -------- ---------- --------
BALANCE
BALANCE AT CHARGED TO CHARGED AT END
BEGINNING COSTS AND TO OTHER OF
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS DEDUCTIONS PERIOD
----------- ---------- ---------- -------- ---------- --------
<S> <C> <C> <C> <C> <C>
Allowance for Doubtful Ac-
counts:
Period from July 17, 1995
to December 31, 1995..... $ -- $ -- $ -- $ -- $ --
Year Ended December 31,
1996..................... $ -- $ 47,044 $ -- $ -- $ 47,044
Year Ended December 31,
1997..................... $ 47,044 $124,350 $ -- $46,310 $125,084
Three Months Ended March
31, 1998 (unaudited)..... $125,084 $109,477 $121,584 $1,244 $354,901
</TABLE>

S-3
<PAGE>

EXHIBIT INDEX

Listed below are the exhibit which are filed as part of this registration
statement (according to the number assigned to them in Item 601 of Regulation
S-K). Each exhibit marked by a (*) is incorporated by reference to ATS's
Registration Statement on Form S-4 (File No. 333-46025) filed on February 10,
1998. Each exhibit marked by a (+) is incorporated by reference to the
original filing of this Registration Statement (No. 333-52481) with the
Commission on May 12, 1998. Each exhibit marked by a (++) is incorporated by
reference to ATS's Registration Statement on Form S-1 (File No. 333-50111)
filed on May 8,1998. Exhibit numbers in parenthesis refer to the exhibit
number in the applicable Registration Statement.

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF DOCUMENT EXHIBIT FILE NO. PAGE NO.
----------- ------------------------------ ------------------------ --------
<C> <S> <C> <C>
1.1 Form of Underwriting Agreement
By and Among the Company and
the Representatives of the
Underwriters, dated , 1998.. To be filed by amendment
2.1 Agreement and Plan of Merger,
dated as of November 21, 1997,
by and among American Tower
Systems Corporation ("ATS"),
American Tower Systems, Inc.,
a Delaware corporation
("ATSI"), Gearon & Co., Inc.,
a Georgia corporation
("Gearon") and J. Michael
Gearon, Jr. (the "Gearon
Stockholder"). (Schedules and
Exhibits omitted)............. (*2.1)
2.2 Amendment No. 1 to Agreement
and Plan of Merger, dated as
of January 22, 1998, among
ATS, American Tower Systems
(Delaware), Inc., a Delaware
corporation (formerly known as
American Tower Systems, Inc.),
Gearon and the Gearon
Stockholder................... (*2.2)
2.3 Agreement and Plan of Merger,
dated as of December 12, 1997,
by and among ATS and American
Tower Corporation, a Delaware
corporation. (Schedules and
Exhibits omitted)............. (*2.3)
3(i).1 Restated Certificate of
Incorporation of ATS, as filed
with the Secretary of State of
the State of Delaware on
November 20, 1997............. (*3(i).1)
3(ii).2 By-Laws of ATS................ (*3(i).2)
3(ii).3 Certificate of Amendment to
Restated Certificate of
Incorporation of ATS, as filed
with the Secretary of State of
the State of Delaware on April
28, 1998...................... (+3(ii).3)
3(ii).4 Certificates of Designation
relating to Interim Preferred
and Exchange Preferred Stock.. To be filed by amendment
3(ii).5 Restated Certificate of
Incorporation of ATS, as filed
with the Secretary of State of
the State of Delaware on June
, 1998....................... To be filed by amendment
5 Form of Opinion of Sullivan &
Worcester LLP................. (+5)
10.1 Parent Loan Agreement, dated
as of June , 1998, by and
among ATS, Toronto Dominion
(Texas), Inc., as
Administrative Agent, and the
other Banks parties thereto... To be filed by amendment
10.2 ATS Facility A Loan Agreement,
dated as of June , 1998 among
American Tower Systems, L.P.
and American Tower Systems
(Delaware), Inc., as
borrowers, and Toronto
Dominion (Texas), Inc., as
Administrative Agent, and the
other Banks parties thereto... To be filed by amendment
10.3 First Amendment to Amended and
Restated Loan Agreement, dated
as of December 31, 1997, by
and among ATSI, Toronto
Dominion (Texas), Inc., as
Administrative Agent and the
Banks parties thereto ........ (*10.3)
</TABLE>
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<TABLE>
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10.4 Assumption Agreement, dated as of
January 22, 1998, by and among ATS,
ATSI, American Tower Systems, L.P., a
Delaware limited partnership, Toronto
Dominion (Texas), Inc., as
Administrative Agent and the Banks
parties thereto........................ (*10.4)
10.5 Asset Purchase Agreement, dated as of
February 5, 1997, by and between ATSI
and Meridian Radio Sites, a California
general partnership ("Meridian Radio").
(Schedules and Exhibits omitted)....... (*10.5)
10.6 First Amendment to Asset Purchase
Agreement, dated as of February 10,
1997, by and between ATSI and Meridian
Radio.................................. (*10.6)
10.7 Second Amendment to Asset Purchase
Agreement, dated as of June 24, 1997,
by and between ATSI and Meridian
Radio.................................. (*10.7)
10.8 Asset Purchase Agreement, dated as of
February 5, 1997, by and between ATSI
and Meridian Sales and Services
Company, a California corporation
("Meridian Sales"). (Schedules and
Exhibits omitted)...................... (*10.8)
10.9 First Amendment to Asset Purchase
Agreement, dated as of February 10,
1997, by and between ATSI and Meridian
Sales.................................. (*10.9)
10.10 Second Amendment to Asset Purchase
Agreement, dated as of June 24, 1997,
by and between ATSI and Meridian
Sales.................................. (*10.10)
10.11 Asset Purchase Agreement, dated as of
February 5, 1997, by and between ATSI
and Meridian Communications North, a
California general partnership
("Meridian North"). (Schedules and
Exhibits omitted)...................... (*10.11)
10.12 First Amendment to Asset Purchase
Agreement, dated as of February 10,
1997, by and between ATSI and Meridian
North.................................. (*10.12)
10.13 Second Amendment to Asset Purchase
Agreement, dated as of June 24, 1997,
by and between ATSI and Meridian
North.................................. (*10.13)
10.14 Asset Purchase Agreement, dated as of
May 13, 1997, by and between ATSI and
Towers L.L.C., a South Carolina limited
liability company. (Schedules and
Exhibits omitted, except for Employment
Agreement)............................. (*10.14)
10.15 Asset Purchase Agreement, dated as of
May 21, 1997, by and between ATSI and B
& E Associates, Inc., a Massachusetts
corporation. (Schedules and Exhibits
omitted)............................... (*10.15)
10.16 Asset Purchase Agreement, dated as of
May 21, 1997, by and between ATSI and
DB Consultants, Inc., a Texas
corporation. (Schedules and Exhibits
omitted)............................... (*10.16)
10.17 Asset Purchase Agreement, dated as of
May 27, 1997, by and between ATSI and
Communication Systems Development,
Inc., a California corporation.
(Schedules and Exhibits omitted)....... (*10.17)
</TABLE>
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<TABLE>
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10.18 Agreement of Limited Liability Company
of Communication Systems Development,
LLC, dated May 30, 1997, by and among
ATSI and Communications Development
Corporation, Inc., a California
corporation........................... (*10.18)
10.19 Asset Purchase Agreement, dated as of
June 25, 1997, by and between ATSI and
Fernand E. Phaneuf, Jr. and Lorraine
Phaneuf, being all of the shareholders
of Tower Sites, Inc., d/b/a Tower
Sites, Inc. a Connecticut corporation.
(Schedules and Exhibits omitted)...... (*10.19)
10.20 Asset Purchase Agreement, dated as of
July 8, 1997, by and between ATSI and
Diablo Communications, Inc., a
California corporation. (Schedules and
Exhibits omitted)..................... (*10.20)
10.21 Asset Purchase Agreement, dated as of
July 8, 1997, by and between ATSI and
Diablo Communications of Southern
California, Inc., a California
corporation. (Schedules and Exhibits
omitted).............................. (*10.21)
10.22 Asset Purchase Agreement, dated as of
July 8, 1997, by and between ATS and
Suburban Cable T.V. Co................ (*10.22)
10.23 Asset Purchase Agreement, dated as of
July 31, 1997, by and between ATSI and
John C. Santangelo and Gerald Harkins,
being all of the shareholders of
Southeast Communications, Inc., and
Southeast Communications, Inc., a
Massachusetts corporation. (Schedules
and Exhibits omitted)................. (*10.23)
10.24 Stock Purchase Agreement, date as of
September 30, 1997, by and between
ATSI, OPM-USA-INC., a Florida
corporation ("OPM"), and the
Stockholders of OPM. (Schedules and
Exhibits omitted)..................... (*10.24)
10.25 Asset Purchase Agreement, dated as of
October 4, 1997, by and between ATSI
and Tucson Communications Company,
L.P., a California limited
partnership. (Schedules and Exhibits
omitted).............................. (*10.25)
10.26 American Tower Systems Corporation
1997 Stock Option Plan, dated as of
November 5, 1997, as amended and
restated on April 28, 1998............ (++10.26)
10.27 American Tower Systems Corporation
Stock Purchase Agreement, dated as of
January 8, 1998, by and among ATS and
the Purchasers........................ (*10.27)
10.28 Employment Agreement, dated as of
January 22, 1988, by and between ATSI
and J. Michael Gearon, Jr............. (*10.28)
10.29 Asset Purchase Agreement, dated as of
January 23, 1998, by and among ATSI,
Midcontinent Media, Inc., a South
Dakota corporation ("Midcontinent"),
Midcontinent Teleport Co., a South
Dakota corporation and a wholly-owned
subsidiary of Midcontient ("MTC"), Wit
Communications, Inc., a Delaware
corporation and a wholly-owned
subsidiary of MTC, and Washington
International Teleport, Inc., a
Delaware corporation and a wholly-
owned subsidiary of Wit............... (*10.29)
</TABLE>
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<TABLE>
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10.30 ARS-ATS Separation
Agreement, dated as of
May . , 1998 by and
among American Radio
Systems Corporation, a
Delaware Corporation
("ARS"), ATS, and CBS
Corporation (formerly
Westinghouse Electric
Corporation), a
Pennsylvania corporation
("CBS")................. To be filed by amendment
10.31 Interim Financing
Agreement, dated as of
., 1998, by and among
ATS and Credit Suisse
First Boston............ To be filed by amendment
10.32 Commitment Letter, dated
., 1998, with respect to
Interim Financing from
Credit Suisse First
Boston ................. To be filed by amendment
21 Subsidiaries of ATS..... (*21)
23.0 Consents of Sullivan & Contained in the opinion of
Worcester LLP........... Sullivan & Worcester LLP filed
herewith as part (+5)
23.1 Independent Auditor's
Consents--Deloitte &
Touche LLP.............. Filed herewith as Exhibit 23.1
23.2 Consent of Pressman
Ciocca Smith LLP........ Filed herewith as Exhibit 23.2
23.3 Consent of Rooney, Ida,
Nolt & Ahern............ Filed herewith as Exhibit 23.3
23.4 Consent of KPMG Peat
Marwick LLP............. Filed herewith as Exhibit 23.4
23.5 Consent of Ernst & Young
LLP..................... Filed herewith as Exhibit 23.5
24 Power of Attorney....... Filed as page II-7 of the
Registration Statement as
originally filed on May 12, 1998
27 Financial Data
Schedule................ (+27)
</TABLE>

<PAGE>

EXHIBIT 23.1A

INDEPENDENT AUDITORS' CONSENT AND REPORT ON SCHEDULES

To the Board of Directors of
American Tower Systems
Corporation

We consent to the use in this Amendment No. 1 to Registration Statement No.
333-52481 of American Tower Systems Corporation on Form S-1 of our report
dated March 6, 1998 (March 27, 1998 as to the sixth paragraph of Note 1 and
the second paragraph of Note 4), appearing in the Prospectus, which is a part
of this Registration Statement, and to the reference to us under the heading
"Experts" in such Prospectus.

Our audits of the consolidated financial statements referred to in our
aforementioned report also included the financial statement schedules of
American Tower Systems Corporation, listed in Item 16. These financial
statement schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion based on our audits. In our opinion,
such financial statement schedules, when considered in relation to the basic
consolidated financial statements taken as a whole, present fairly in all
material respects the information set forth therein.

/s/ Deloitte & Touche LLP

Deloitte & Touche LLP
Boston, Massachusetts

May 29 , 1998

<PAGE>

EXHIBIT 23.2

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

As independent certified public accountants, we hereby consent to the use of
our report and to all references to our Firm included in or made part of this
registration statement.

/s/ Pressman Ciocca Smith LLP

Hatboro, Pennsylvania

May 28, 1998

<PAGE>

EXHIBIT 23.3

INDEPENDENT AUDITORS' CONSENT

We consent to the use in the Registration Statement of American Tower
Systems Corporation on Form S-1 of our report dated February 7, 1997 and
October 22, 1997 as to note 9 to the financial statements (relating to the
financial statements of Diablo Communications of Southern California, Inc.)
appearing in the Prospectus, which is part of this Registration Statement.

We also consent to the reference to us under the headings "Experts" in such
Prospectus.

/s/ Rooney, Ida, Nolt & Ahern
Certified Public Accountants

Oakland, California

May 28, 1998

<PAGE>

EXHIBIT 23.4

The Board of Directors
American Tower Corporation

We consent to the use of our report dated January 23, 1998, related to the
consolidated financial statements of American Tower Corporation and
subsidiaries as of December 31, 1997 and 1996 and for each of the years in the
three year period ended December 31, 1997, included herein and to the reference
to our firm under the heading "Experts" in the Registration Statement.

/s/ KPMG Peat Marwick LLP

Houston, Texas

May 28, 1998

<PAGE>

EXHIBIT 23.5

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts" and to
the use of our report dated January 13, 1998 (except Note 7, as to which the
date is January 27, 1998), with respect to the financial statements of Tucson
Communications Company included in the Registration Statement (Form S-1 No.
333-52481) and related Prospectus of American Tower Systems Corporation for
the registration of shares of its common stock.

/s/ Ernst & Young LLP

San Diego, California

May 28, 1998